AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 15, 2017
1933 ACT FILE NO. 333-
1940 ACT FILE NO. 811 - 03763
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_______________________
REGISTRATION STATEMENT ON
FORM S-6
________________________
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933 OF
SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
A. EXACT NAME OF TRUST: GUGGENHEIM DEFINED PORTFOLIOS, SERIES 1561
B. NAME OF DEPOSITOR: GUGGENHEIM FUNDS DISTRIBUTORS, LLC
C. COMPLETE ADDRESS OF DEPOSITOR'S PRINCIPAL EXECUTIVE OFFICES:
Guggenheim Funds Distributors, LLC
2455 Corporate West Drive
Lisle, Illinois 60532
D. NAME AND COMPLETE ADDRESS OF AGENT FOR SERVICE:
Copies to:
AMY LEE, ESQ. ERIC F. FESS, ESQ.
Vice President and Secretary Chapman and Cutler LLP
Guggenheim Funds Distributors, LLC 111 West Monroe Street
2455 Corporate West Drive Chicago, Illinois 60603
Lisle, Illinois 60532 (312) 845-3000
(630) 505-3700
It is proposed that this filing will become effective (check appropriate box)
[_] immediately upon filing pursuant to paragraph (b)
[_] on (date) pursuant to paragraph (b)
[_] 60 days after filing pursuant to paragraph (a)(1)
[_] on (date) pursuant to paragraph (a)(1) of rule 485
[_] This post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
E. TITLE OF SECURITIES BEING REGISTERED: Units of fractional undivided
beneficial interest.
F. APPROXIMATE DATE OF PROPOSED SALE TO PUBLIC: As soon as practicable
after the effective date of the Registration Statement.
[_] Check box if it is proposed that this filing will become effective on
(date) at (time) pursuant to Rule 487.
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The registration hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell these securities and is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
Preliminary Prospectus Dated February 15, 2017, Subject to Completion
Guggenheim Defined Portfolios, Series 1561
Guggenheim SPY Accelerated Return Trust, Series 1
GUGGENHEIM LOGO
PROSPECTUS PART A DATED _______, 2017
The ability of Guggenheim SPY Accelerated Return Trust, Series 1 to provide
the capped return set forth in this prospectus is dependent on unitholders
purchasing units at the trust's inception and holding the units until the trust
is terminated.
The Securities and Exchange Commission has not approved or
disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
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INVESTMENT SUMMARY
Use this Investment Summary to help you decide whether an investment in
this trust is right for you. More detailed information can be found later in
this prospectus.
Overview
Guggenheim Defined Portfolios, Series 1561 is a unit investment trust that
consists of the Guggenheim SPY Accelerated Return Trust, Series 1 (the
"trust"). Guggenheim Funds Distributors, LLC ("Guggenheim Funds" or the
"sponsor") serves as the sponsor of the trust.
The trust is scheduled to terminate at the earlier of: (i) approximately
two years; or (ii) when the per unit net asset value reaches or exceeds the
Capped Return (as defined below), net of the sales charge and other related
investment expenses.
Investment Objective
The trust seeks to provide target returns based on the price performance
of shares of the SPDR[R] S&P 500[R] ETF Trust (the "ETF"). There is no
assurance that the trust will achieve its investment objective.
Principal Investment Strategy
The trust seeks to achieve its objective by utilizing an investment
strategy that involves (i) investing in U.S. Treasury obligations (the "Treasury
Obligations"); (ii) purchasing and writing "put" and "call" FLexible EXchange[R]
Options entitling the trust to purchase or sell shares of the ETF ("FLEX
Options") scheduled to expire on _____________, 2019 (the "Option Expiration
Date"); and (iii) holding cash to pay for fees and expenses of the trust. On the
trust's inception date, the trust will deposit the Treasury Obligations, the
exchange-traded FLEX Options and cash in the amounts set forth in the "Trust
Portfolio."
The trust is designed for investors who intend to purchase units at
inception and hold them until ______, 2019 (the "Mandatory Termination Date")
and seek a percentage total return per unit that increases by [3] times any
percentage increase in the price of the ETF relative to the Initial Value,
defined below, up to a maximum total return of [30]% (the "Cap"). The trust
seeks to provide returns or losses net of all estimated trust fees and expenses
based on the performance of the ETF for units purchased at the trust's
inception date and held until the Mandatory Termination Date. The expected
returns are as follows:
o If, at the Option Expiration Date, the percentage increase in the
price of the ETF since the trust's inception date is greater than or
equal to [10]%, the amount returned from the FLEX Options and maturing
principal from the Treasury Obligations over the life of the trust is
intended to be equal to $[13] per unit (the "Capped Return").
o If, at the Option Expiration Date, the percentage increase in the
price of the ETF since the trust's inception date is between [0]% and
[10]%, the amount returned from the FLEX Options and the maturing
principal from the Treasury Obligations over the life of the trust is
intended to be [3] times the total return of the ETF between $[10 and
$13] per unit.
o If, at the Option Expiration Date, the percentage decreases in the
price of the ETF since the trust's inception date, the amount returned
from the FLEX Options and the maturing principal from the Treasury
Obligations over the life of the trust is intended to reflect that
loss on a 1-to-1 basis down to $[0] (the "Maximum Loss").
o If, at any time during the life of the trust, the per unit net asset
value meets or exceeds the Capped Return, net of any upfront sales
charges and other related investment expenses, the trust has a
predetermined trigger that would automatically liquidate the trust's
holdings.
The trust may outperform the ETF if the ETF's price increases by less than
30% as of the Option Expiration Date. Due to the Capped Return, the trust will
underperform the ETF if the ETF's price has increased by greater than 30% as of
the Option Expiration Date.
The trust may not be able to achieve the anticipated returns set forth in
this prospectus. The trust's performance may be impacted by a variety of
factors, including but not limited to redemption activity, unusual economic
events, market movements and changes in the liquidity of the FLEX Options. The
trust's portfolio is not managed. In the unlikely event that the Treasury
Obligations and the FLEX Options cannot maintain their proper ratios, there may
be significant impact to the trust's ability to meet its investment objective
or follow its principal investment strategy.
Option payoff line chart:
Mkt Move Total
-50.0% -51.0%
-49.8% -50.8%
-49.6% -50.6%
-49.4% -50.4%
-49.2% -50.2%
-49.0% -50.0%
-48.8% -49.8%
-48.6% -49.6%
-48.4% -49.4%
-48.2% -49.2%
-48.0% -49.0%
-47.8% -48.8%
-47.6% -48.6%
-47.4% -48.4%
-47.2% -48.2%
-47.0% -48.0%
-46.8% -47.8%
-46.6% -47.6%
-46.4% -47.4%
-46.2% -47.2%
-46.0% -47.0%
-45.8% -46.8%
-45.6% -46.6%
-45.4% -46.4%
-45.2% -46.2%
-45.0% -46.0%
-44.8% -45.8%
-44.6% -45.6%
-44.4% -45.4%
-44.2% -45.2%
-44.0% -45.0%
-43.8% -44.8%
-43.6% -44.6%
-43.4% -44.4%
-43.2% -44.2%
-43.0% -44.0%
-42.8% -43.8%
-42.6% -43.6%
-42.4% -43.4%
-42.2% -43.2%
-42.0% -43.0%
-41.8% -42.8%
-41.6% -42.6%
-41.4% -42.4%
-41.2% -42.2%
-41.0% -42.0%
-40.8% -41.8%
-40.6% -41.6%
-40.4% -41.4%
-40.2% -41.2%
-40.0% -41.0%
-39.8% -40.8%
-39.6% -40.6%
-39.4% -40.4%
-39.2% -40.2%
-39.0% -40.0%
-38.8% -39.8%
-38.6% -39.6%
-38.4% -39.4%
-38.2% -39.2%
-38.0% -39.0%
-37.8% -38.8%
-37.6% -38.6%
-37.4% -38.4%
-37.2% -38.2%
-37.0% -38.0%
-36.8% -37.8%
-36.6% -37.6%
-36.4% -37.4%
-36.2% -37.2%
-36.0% -37.0%
-35.8% -36.8%
-35.6% -36.6%
-35.4% -36.4%
-35.2% -36.2%
-35.0% -36.0%
-34.8% -35.8%
-34.6% -35.6%
-34.4% -35.4%
-34.2% -35.2%
-34.0% -35.0%
-33.8% -34.8%
-33.6% -34.6%
-33.4% -34.4%
-33.2% -34.2%
-33.0% -34.0%
-32.8% -33.8%
-32.6% -33.6%
-32.4% -33.4%
-32.2% -33.2%
-32.0% -33.0%
-31.8% -32.8%
-31.6% -32.6%
-31.4% -32.4%
-31.2% -32.2%
-31.0% -32.0%
-30.8% -31.8%
-30.6% -31.6%
-30.4% -31.4%
-30.2% -31.2%
-30.0% -31.0%
-29.8% -30.8%
-29.6% -30.6%
-29.4% -30.4%
-29.2% -30.2%
-29.0% -30.0%
-28.8% -29.8%
-28.6% -29.6%
-28.4% -29.4%
-28.2% -29.2%
-28.0% -29.0%
-27.8% -28.8%
-27.6% -28.6%
-27.4% -28.4%
-27.2% -28.2%
-27.0% -28.0%
-26.8% -27.8%
-26.6% -27.6%
-26.4% -27.4%
-26.2% -27.2%
-26.0% -27.0%
-25.8% -26.8%
-25.6% -26.6%
-25.4% -26.4%
-25.2% -26.2%
-25.0% -26.0%
-24.8% -25.8%
-24.6% -25.6%
-24.4% -25.4%
-24.2% -25.2%
-24.0% -25.0%
-23.8% -24.8%
-23.6% -24.6%
-23.4% -24.4%
-23.2% -24.2%
-23.0% -24.0%
-22.8% -23.8%
-22.6% -23.6%
-22.4% -23.4%
-22.2% -23.2%
-22.0% -23.0%
-21.8% -22.8%
-21.6% -22.6%
-21.4% -22.4%
-21.2% -22.2%
-21.0% -22.0%
-20.8% -21.8%
-20.6% -21.6%
-20.4% -21.4%
-20.2% -21.2%
-20.0% -21.0%
-19.8% -20.8%
-19.6% -20.6%
-19.4% -20.4%
-19.2% -20.2%
-19.0% -20.0%
-18.8% -19.8%
-18.6% -19.6%
-18.4% -19.4%
-18.2% -19.2%
-18.0% -19.0%
-17.8% -18.8%
-17.6% -18.6%
-17.4% -18.4%
-17.2% -18.2%
-17.0% -18.0%
-16.8% -17.8%
-16.6% -17.6%
-16.4% -17.4%
-16.2% -17.2%
-16.0% -17.0%
-15.8% -16.8%
-15.6% -16.6%
-15.4% -16.4%
-15.2% -16.2%
-15.0% -16.0%
-14.8% -15.8%
-14.6% -15.6%
-14.4% -15.4%
-14.2% -15.2%
-14.0% -15.0%
-13.8% -14.8%
-13.6% -14.6%
-13.4% -14.4%
-13.2% -14.2%
-13.0% -14.0%
-12.8% -13.8%
-12.6% -13.6%
-12.4% -13.4%
-12.2% -13.2%
-12.0% -13.0%
-11.8% -12.8%
-11.6% -12.6%
-11.4% -12.4%
-11.2% -12.2%
-11.0% -12.0%
-10.8% -11.8%
-10.6% -11.6%
-10.4% -11.4%
-10.2% -11.2%
-10.0% -11.0%
-9.8% -10.8%
-9.6% -10.6%
-9.4% -10.4%
-9.2% -10.2%
-9.0% -10.0%
-8.8% -9.8%
-8.6% -9.6%
-8.4% -9.4%
-8.2% -9.2%
-8.0% -9.0%
-7.8% -8.8%
-7.6% -8.6%
-7.4% -8.4%
-7.2% -8.2%
-7.0% -8.0%
-6.8% -7.8%
-6.6% -7.6%
-6.4% -7.4%
-6.2% -7.2%
-6.0% -7.0%
-5.8% -6.8%
-5.6% -6.6%
-5.4% -6.4%
-5.2% -6.2%
-5.0% -6.0%
-4.8% -5.8%
-4.6% -5.6%
-4.4% -5.4%
-4.2% -5.2%
-4.0% -5.0%
-3.8% -4.8%
-3.6% -4.6%
-3.4% -4.4%
-3.2% -4.2%
-3.0% -4.0%
-2.8% -3.8%
-2.6% -3.6%
-2.4% -3.4%
-2.2% -3.2%
-2.0% -3.0%
-1.8% -2.8%
-1.6% -2.6%
-1.4% -2.4%
-1.2% -2.2%
-1.0% -2.0%
-0.8% -1.8%
-0.6% -1.6%
-0.4% -1.4%
-0.2% -1.2%
0.0% -1.0%
0.2% -0.4%
0.4% 0.2%
0.6% 0.8%
0.8% 1.4%
1.0% 2.0%
1.2% 2.6%
1.4% 3.2%
1.6% 3.8%
1.8% 4.4%
2.0% 5.0%
2.2% 5.6%
2.4% 6.2%
2.6% 6.8%
2.8% 7.4%
3.0% 8.0%
3.2% 8.6%
3.4% 9.2%
3.6% 9.8%
3.8% 10.4%
4.0% 11.0%
4.2% 11.6%
4.4% 12.2%
4.6% 12.8%
4.8% 13.4%
5.0% 14.0%
5.2% 14.6%
5.4% 15.2%
5.6% 15.8%
5.8% 16.4%
6.0% 17.0%
6.2% 17.6%
6.4% 18.2%
6.6% 18.8%
6.8% 19.4%
7.0% 20.0%
7.2% 20.6%
7.4% 21.2%
7.6% 21.8%
7.8% 22.4%
8.0% 23.0%
8.2% 23.6%
8.4% 24.2%
8.6% 24.8%
8.8% 25.4%
9.0% 26.0%
9.2% 26.6%
9.4% 27.2%
9.6% 27.8%
9.8% 28.4%
10.0% 29.0%
10.2% 29.6%
10.4% 30.0%
10.6% 30.0%
10.8% 30.0%
11.0% 30.0%
11.2% 30.0%
11.4% 30.0%
11.6% 30.0%
11.8% 30.0%
12.0% 30.0%
12.2% 30.0%
12.4% 30.0%
12.6% 30.0%
12.8% 30.0%
13.0% 30.0%
13.2% 30.0%
13.4% 30.0%
13.6% 30.0%
13.8% 30.0%
14.0% 30.0%
14.2% 30.0%
14.4% 30.0%
14.6% 30.0%
14.8% 30.0%
15.0% 30.0%
15.2% 30.0%
15.4% 30.0%
15.6% 30.0%
15.8% 30.0%
16.0% 30.0%
16.2% 30.0%
16.4% 30.0%
16.6% 30.0%
16.8% 30.0%
17.0% 30.0%
17.2% 30.0%
17.4% 30.0%
17.6% 30.0%
17.8% 30.0%
18.0% 30.0%
18.2% 30.0%
18.4% 30.0%
18.6% 30.0%
18.8% 30.0%
19.0% 30.0%
19.2% 30.0%
19.4% 30.0%
19.6% 30.0%
19.8% 30.0%
20.0% 30.0%
20.2% 30.0%
20.4% 30.0%
20.6% 30.0%
20.8% 30.0%
21.0% 30.0%
21.2% 30.0%
21.4% 30.0%
21.6% 30.0%
21.8% 30.0%
22.0% 30.0%
22.2% 30.0%
22.4% 30.0%
22.6% 30.0%
22.8% 30.0%
23.0% 30.0%
23.2% 30.0%
23.4% 30.0%
23.6% 30.0%
23.8% 30.0%
24.0% 30.0%
24.2% 30.0%
24.4% 30.0%
24.6% 30.0%
24.8% 30.0%
25.0% 30.0%
25.2% 30.0%
25.4% 30.0%
25.6% 30.0%
25.8% 30.0%
26.0% 30.0%
26.2% 30.0%
26.4% 30.0%
26.6% 30.0%
26.8% 30.0%
27.0% 30.0%
27.2% 30.0%
27.4% 30.0%
27.6% 30.0%
27.8% 30.0%
28.0% 30.0%
28.2% 30.0%
28.4% 30.0%
28.6% 30.0%
28.8% 30.0%
29.0% 30.0%
29.2% 30.0%
29.4% 30.0%
29.6% 30.0%
29.8% 30.0%
30.0% 30.0%
30.2% 30.0%
30.4% 30.0%
30.6% 30.0%
30.8% 30.0%
31.0% 30.0%
31.2% 30.0%
31.4% 30.0%
31.6% 30.0%
31.8% 30.0%
32.0% 30.0%
32.2% 30.0%
32.4% 30.0%
32.6% 30.0%
32.8% 30.0%
33.0% 30.0%
33.2% 30.0%
33.4% 30.0%
33.6% 30.0%
33.8% 30.0%
34.0% 30.0%
34.2% 30.0%
34.4% 30.0%
34.6% 30.0%
34.8% 30.0%
35.0% 30.0%
35.2% 30.0%
35.4% 30.0%
35.6% 30.0%
35.8% 30.0%
36.0% 30.0%
36.2% 30.0%
36.4% 30.0%
36.6% 30.0%
36.8% 30.0%
37.0% 30.0%
37.2% 30.0%
37.4% 30.0%
37.6% 30.0%
37.8% 30.0%
38.0% 30.0%
38.2% 30.0%
38.4% 30.0%
38.6% 30.0%
38.8% 30.0%
39.0% 30.0%
39.2% 30.0%
39.4% 30.0%
39.6% 30.0%
39.8% 30.0%
40.0% 30.0%
40.2% 30.0%
40.4% 30.0%
40.6% 30.0%
40.8% 30.0%
41.0% 30.0%
41.2% 30.0%
41.4% 30.0%
41.6% 30.0%
41.8% 30.0%
42.0% 30.0%
42.2% 30.0%
42.4% 30.0%
42.6% 30.0%
42.8% 30.0%
43.0% 30.0%
43.2% 30.0%
43.4% 30.0%
43.6% 30.0%
43.8% 30.0%
44.0% 30.0%
44.2% 30.0%
44.4% 30.0%
44.6% 30.0%
44.8% 30.0%
45.0% 30.0%
45.2% 30.0%
45.4% 30.0%
45.6% 30.0%
45.8% 30.0%
46.0% 30.0%
46.2% 30.0%
46.4% 30.0%
46.6% 30.0%
46.8% 30.0%
47.0% 30.0%
47.2% 30.0%
47.4% 30.0%
47.6% 30.0%
47.8% 30.0%
48.0% 30.0%
48.2% 30.0%
48.4% 30.0%
48.6% 30.0%
48.8% 30.0%
49.0% 30.0%
49.2% 30.0%
49.4% 30.0%
49.6% 30.0%
49.8% 30.0%
50.0% 30.0%
The Treasury Obligations are scheduled to mature on [_____________, 2019],
shortly before the Mandatory Termination Date. The FLEX Options expire shortly
before the Mandatory Termination Date, with payouts at expiration calculated
based on the performance of the ETF as of the Option Expiration Date relative to
the price of the ETF on the trust's inception date (the "Initial Value"). [Each
FLEX Option entitles a purchaser the option to purchase (for the call options)
or sell (for the put options) 100 shares of the ETF at the strike price]. The
FLEX Options are intended to be liquidated as of the close of the market on the
Option Expiration Date, rather than be exercised according to the FLEX Options'
terms in order to avoid having the trust receive shares of the ETF or be
obligated to deliver shares of the ETF.
The trust will also keep cash in its portfolio to pay estimated trust fees
and organization costs. The cash may be deposited on the trust's inception date
or may be from interest income, if any, received from the Treasury Obligations.
However, if trust expenses exceed the amount of cash in the portfolio due to
significant redemptions or failure of the trust to reach a certain size, then
the sponsor may be required to sell trust property (including the Treasury
Obligations and/or the FLEX Options) to meet such expenses. In that case, the
final distribution amount is expected to be less than described below. Fees and
expenses are described below under "Fee Table."
In addition, the trust also provides a built-in trigger based on
performance. If the per unit net asset value reaches or exceeds the Capped
Return, net of the sales charge and other related investment expenses, between
[_______], 2017 and [_______], 2019, then the trust will automatically liquidate
its holdings. The day on which the performance trigger is implemented shall be
referred to as the "Performance Trigger Day." The net proceeds from the
liquidation may be more or less than the amount calculated on the Performance
Trigger Day due to market conditions and because the trustee may be unable to
liquidate the trust's holdings at the same price used to calculate the net asset
value on the Performance Trigger Day. Consequently, the net proceeds received by
a unitholder may be greater or less than the Capped Return, net of the sales
charge and other related investment expenses. The liquidation proceeds will then
be returned to all unitholders on the settlement date.
The maximum amount an investor who purchases units on the trust's
inception date and holds until the Mandatory Termination Date is intended to
receive over the trust's life is $[13] ([130]% of the unit price at inception).
The trust may experience substantial losses from the FLEX Options, and the FLEX
Options may expire worthless. Investors may lose money. Even if the price of
the ETF increases significantly, unitholders will not receive a return on their
investment in excess of the Capped Return.
Assets Held by the Trust
Treasury Obligations. U.S. Treasury securities, such as bills, notes and
bonds, are debt obligations of the U.S. government. Because these debt
obligations are backed by the "full faith and credit" of the United States,
Treasury Obligations are generally viewed in the market as having virtually no
"credit risk," meaning that it is highly probable interest and principal
payments on the debt obligations will be paid fully and on time.
The FLEX Options. The trust's portfolio holds FLEX Options referred to as
the "Purchased Call Options," "Written Put Options" and "Written Call Options."
The Written Put Options and Written Call Options together constitute the
"Written Options."
The FLEX Options are European-style options, which means that they will be
exercisable at the strike price only on the Option Expiration Date. FLEX Options
are standard listed option contracts available through national securities
exchanges that are guaranteed for settlement by the Options Clearing Corporation
(the "OCC"), a market clearinghouse. The FLEX Options are listed on the Chicago
Board Options Exchange (the "CBOE"). The trust is designed so that any amount
owed by the trust on the Written Options will be covered by payouts at
expiration from the Purchased Call Options. The trust receives premiums in
exchange for the Written Options and pays premiums in exchange for the Purchased
Call Options. The OCC and CBOE do not charge ongoing fees to writers or
purchasers of the Options during their life for continuing to hold the option
contracts. The trust will pledge some or all of the Treasury Obligations as
collateral for the Options. As a result, the Options will be fully covered and
no additional collateral will be necessary during the life of the trust.
The OCC guarantees performance by each of the counterparties to the FLEX
Options, becoming the "buyer for every seller and the seller for every buyer,"
thereby protecting clearing members and options traders from counterparty risk.
Subject to determination by the Securities Committee of the OCC, adjustments may
be made to the FLEX Options for certain events (collectively, "Corporate
Actions") specified in the OCC's bylaws and rules such as: certain stock
dividends or distributions, stock splits, reverse stock splits, rights
offerings, distributions, reorganizations, recapitalizations, or
reclassifications with respect to an underlying security, or a merger,
consolidation, dissolution or liquidation of the issuer of the underlying
security. According to the OCC's by-laws, the nature and extent of any such
adjustment is to be determined by the OCC's Securities Committee, in light of
the circumstances known to it at the time such determination is made, based on
its judgment as to what is appropriate for the protection of investors and the
public interest, taking into account such factors as fairness to holders and
writers (or purchasers and sellers) of the affected options, the maintenance of
a fair and orderly market in the affected options, consistency of interpretation
and practice, efficiency of exercise settlement procedures, and the coordination
with other clearing agencies of the clearance and settlement of transactions in
the underlying interest.
The description and terms of the FLEX Options to be entered into with the
OCC are set forth in the by-laws and rules of the OCC. Please see
www.optionsclearing.com for more information. The OCC's website is not
considered part of this prospectus, nor is it incorporated by reference herein.
Purchased Call Options. The Purchased Call Options are call options
purchased by the trust, each with a strike price at [100]% of the Initial Value
("Purchased Call Option Strike Price"). If the price of the ETF as of the
Option Expiration Date (the "Closing Value") is less than or equal to the
Purchased Call Option Strike Price at the Option Expiration Date, the Purchased
Call Options will expire without a payment being made to the trust (i.e., the
options will expire worthless). If the Closing Value is greater than the
Purchased Call Option Strike Price, then the Purchased Call Options
collectively provide for a per-unit dollar amount payment of [3] X (Closing
Value -Purchased Call Option Strike Price)/Initial Value to be made to the
trust on the Option Expiration Date corrected for any Corporate Actions.
Written Put Options. The Written Put Options are put options for cash
settlement written by the trust each with a strike price at [90]% the Initial
Value (the "Written Put Option Strike Price"). If the Closing Value is greater
than or equal to the Written Put Option Strike Price at the Option Expiration
Date, the Written Put Options will expire without a payment being made by the
trust. If the Closing Value is less than the Written Put Option Strike Price,
then the Written Put Options collectively provide for a per-unit dollar amount
payment of [__] X (Written Put Option Strike Price - Closing Value)/Initial
Value to be made by the trust on the Option Expiration Date corrected for any
Corporate Actions.
Written Call Options. The Written Call Options are call options for cash
settlement written by the trust each with a strike price at approximately [6.6]%
of the Initial Value (the "Written Call Option Strike Price"). If the value of
the Closing Value is less than or equal to the Written Call Option Strike Price
at the Option Expiration Date, the Written Call Options will expire without a
payment being made by the trust. If the Closing Value is greater than the
Written Call Option Strike Price, then the Written Call Options collectively
provide for a per unit dollar amount payment of [__] X (Closing Value - Written
Call Option Strike Price)/Initial Value to be made by the trust on the Option
Expiration Date corrected for any Corporate Actions.
See "Hypothetical Option Expiration Examples" in the appendix of the
prospectus for additional information.
The ETF and The Index
The ETF is an exchange-traded fund that trades on the NYSE Arca, Inc. stock
exchange under the ticker symbol "SPY." The ETF seeks to track the investment
results of the S&P 500[R] Index (the "Index"), which measures the performance of
large-capitalization U.S. equity securities. The components of the Index, and
the degree to which these components represent certain industries, may change
over time. The Index is reconstituted on an as-needed basis. The ETF seeks to
achieve its investment objective by holding a portfolio of the common stocks
that are included in the Index, with the weight of each stock in its portfolio
substantially corresponding to the weight of such stock in the Index. Although
the ETF may fail to own certain securities of the Index at any particular time,
the ETF generally will be substantially invested in securities of the Index,
which should result in a close correspondence between the performance of the
Index and the performance of the ETF.
The ETF seeks to track the investment results of the Index before fees and
expenses of the ETF. The sponsor has derived all information regarding the ETF
contained in this prospectus from the registration statement for the ETF. Such
information reflects the policies of, and is subject to change by, the ETF's
sponsor, PDR Services, LLC. Information concerning the ETF filed with the SEC
can be located by reference to SEC file number 811-06125 and 33-46080. The
sponsor has not undertaken any independent review or due diligence of the SEC
filings by the issuer of the ETF or any other publicly available information
regarding such issuer. Information from outside sources is not incorporated by
reference in, and should not be considered part of, this prospectus.
The summary information is not designed to be, and should not be
interpreted as, an effort to present information regarding the financial
prospects of any issuer or any trends, events or other factors that may have a
positive or negative influence on those prospects or as an endorsement of any
particular issuer or exchange-traded fund. The trust is not sponsored, endorsed,
sold or promoted by SPDR[R] S&P 500[R] ETF Trust, PDR Services, LLC or S&P Dow
Jones Indices LLC. SPDR[R] S&P 500[R] ETF Trust, PDR Services, LLC and S&P Dow
Jones Indices LLC have not passed on the legality or suitability of, or the
accuracy or adequacy of, descriptions and disclosures relating to the trust or
the FLEX Options. SPDR[R] S&P 500[R] ETF Trust, PDR Services, LLC and S&P Dow
Jones Indices LLC make no representations or warranties, express or implied,
regarding the advisability of investing in the trust or the FLEX Options or
results to be obtained by the trust or the FLEX Options, unitholders or any
other person or entity from use of the ETF. SPDR[R] S&P 500[R] ETF Trust, PDR
Services, LLC and S&P Dow Jones Indices LLC have no liability in connection with
the management, administration, marketing or trading of the trust or the FLEX
Options.
--------------------------------------------------------------------------------
Essential Information
Unit price at inception: $10
Inception date: ____________, 2017
Termination date: ____________, 2019
Evaluation time: As of the 3 p.m. Eastern time;
however, on the first day units
are sold, the evaluation time will
be as of the close of trading of the
New York Stock Exchange
(normally 4 p.m. Eastern time
or the time the registration
statement filed with the Securities
and Exchange Commission becomes
effective, if later)
Distribution date: 25th day of ____________
(commencing on
____________, 2017, if any)
Record date: 10th day of ____________
(commencing on
____________, 2017, if any)
CUSIP Numbers:
Cash Distributions
Standard Accounts:
Fee Account Cash:
Ticker:
Minimum investment: $10,000 / 1,000 units
Summary of Defined Terms
Option Expiration Date: _________, 2019
ETF: SPDR[R] S&P 500[R]
ETF Trust
Index: S&P 500[R] Index
Initial Value: $__ (an amount equal
to a price of a share
of the ETF on the
inception date)
Multiplier [3]
Cap [30]% of the Initial Value
Maximum Loss: Loss of $10 (100% of
the the unit price
at inception)
Capped Return: $[13] ([130]% of the
unit price at inception)
Unitholders may also receive
interest income from the
Treasury Obligations less the
trust's operating expenses,
if any.
Maximum payment
over the trust's life: $__ (__% of the
unit price at inception)
Minimum payment
at trust Mandatory
Termination Date: $__ (__% of the
unit price at inception)
Unitholders may also
receive interest income
from the Treasury
Obligations less the
trust's operating
expenses, if any.
--------------------------------------------------------------------------------
Principal Risks
As with all investments, you may lose some or all of your investment in
the trust. No assurance can be given that the trust's investment objective will
be achieved. The trust also might not perform as well as you expect. This can
happen for reasons such as these:
o Passive Investment Risk. The value of your investment may fall over
time. The trust will generally hold, and may continue to buy, the same
securities even though a security's outlook, rating, market value or
yield may have changed.
o Market Risk. Market risk is the risk that a particular security in the
trust, the trust itself or securities in general may fall in value.
Market value may be affected by a variety of factors, including
general securities markets movements, changes in the financial
condition of an issuer or a sector, changes in perceptions about an
issuer or a sector, interest rates and inflation and governmental
policies and litigation. Although the sponsor, who serves as the
evaluator of the trust (the "evaluator"), carefully supervises your
trust, you should remember that it does not manage your trust. Your
trust will not sell a security solely because the market value falls,
as is possible in a managed fund.
o Investment Risk. You may lose a significant portion of your
investment. The trust does not provide principal protection and you
may not receive a return of the capital you invest. In addition, the
units will not realize more than the Capped Return, even if the return
on the ETF far exceeds that level.
o Performance Trigger Risk. The application of the predetermined trigger
may result in the trust terminating at a price below what may have
been possible if the trigger were not in place. In addition, investors
may be subject to adverse tax consequences and possibly short-term
capital gains rates as a result of the application of the trigger.
Furthermore, the net proceeds from the liquidation may be more or less
than the amount calculated on the Performance Trigger Day due to
market conditions and because the trustee may be unable to liquidate
the trust's holdings at the same price used to calculate the net asset
value on the Performance Trigger Day.
o Capped Upside and No Downside Protection. The trust's return is
subject to an upside cap and no downside protection. The trust's
ability to provide enhanced return and capped upside at the Capped
Return is dependent on unitholders purchasing units at the trust's
inception and holding them until the trust is terminated. You may
realize a return or loss that is higher or lower than the intended
returns or losses as a result of redeeming units prior to the
Mandatory Termination Date, where FLEX Options are otherwise
liquidated by the trust prior to expiration, if a Corporate Action
occurs with respect to the ETF, or if there are increases in potential
tax-related expenses and other expenses of the trust above estimated
levels.
o The ETF Risk. The trust is subject to performance and equity risk
related to the ETF, the Index and securities comprising the Index. The
formulas used to calculate the FLEX Options' payments at expiration
are based on the price performance of the ETF. The FLEX Options
represent indirect positions in the ETF and are subject to changes in
value as the price of the ETF rises or falls. The value of the FLEX
Options may be adversely affected by various factors affecting the
ETF, the Index and the value of the securities comprising the Index.
The settlement value of the FLEX Options is based on the Closing Value
on the Option Expiration Date only and will be substantially
determined by market conditions as of such time. The FLEX Options are
intended to be liquidated as of the close of market on the Option
Expiration Date rather than be exercised according to the FLEX
Options' terms in order to avoid having the trust receive shares of
the ETF or be obligated to deliver shares of the ETF. The value of the
ETF will fluctuate over time based on fluctuations in the value of the
stocks held by the ETF, which may be impacted by changes in general
economic conditions, expectations for future economic growth, and
corporate profits and interest rates. Although common stocks have
historically generated higher average returns than fixed-income
securities over the long term, common stocks also have experienced
significantly more volatile returns. Common stocks are structurally
subordinated to preferred stocks, bonds and other debt instruments in
a company's capital structure and represent a residual claim on the
issuer's assets that have no value unless such assets are sufficient
to cover all other claims.
The value of the trust does not appreciate due to dividend payments
paid by the ETF, because the trust does not own the ETF. The trust
seeks to provide target returns on the price performance of the ETF,
which does not include returns from dividends paid by the ETF.
Unitholders will not have control, voting rights or rights to receive
cash dividends or other distributions or other rights that holders of
a direct investment in the ETF would have.
o Options Risk. The value of the FLEX Options may change with the
implied volatility of the ETF, the Index and the securities comprising
the Index. No one can predict whether implied volatility will rise or
fall in the future. It is not anticipated that there will be an
existing market for options with the same customized terms as the FLEX
Options, and an active market may not be established. Prior to the
trust's inception date, there has been no existing trading market for
the FLEX Options.
The values of the FLEX Options do not increase or decrease at the same
rate as the ETF or the Index. Prior to the Option Expiration Date, the
value of the FLEX Options is determined based upon market quotations,
the last asked or bid price in the over-the-counter market or using
other recognized pricing methods. The value of the FLEX Options prior
to the Option Expiration Date may vary because of related factors
other than the price of shares of the ETF. Factors that may influence
the value of the FLEX Options are interest rate changes, implied
volatility levels of the ETF, Index and securities comprising the
Index and implied dividend levels of the ETF, Index and securities
comprising the Index, among others.
Written Options Risk. The value of the Written Options reduces
the value of your units. The Written Options create an obligation
to make a payment in contrast to the Purchased Option, which
creates the potential for receipt of a payment. As the value of
the Written Options increases, it has a negative impact on the
value of your units.
Credit Risk. Credit risk is the risk an issuer, guarantor or
counterparty of a security in the trust is unable or unwilling to
meet its obligation on the security. The OCC acts as guarantor
and central counterparty with respect to the FLEX Options. As a
result, the ability of the trust to meet its objective depends on
the OCC being able to meet its obligations.
Liquidity Risk. Liquidity risk is the risk that the value of a
FLEX Option will fall in value if trading in the FLEX Option is
limited or absent. No one can guarantee that a liquid secondary
trading market will exist for the FLEX Options. Trading in the
FLEX Options may be less deep and liquid than certain other
securities. FLEX Options may be less liquid than certain
non-customized options. The sponsor expects that the trust will
hold [10]% or less of its net asset value in illiquid securities.
In a less liquid market for the FLEX Options, liquidating the
FLEX Options upon a redemption of units may require the payment
of a premium or acceptance of a discounted price and may take
longer to complete. In a less liquid market for the FLEX Options,
the liquidation of a large number of FLEX Options may more
significantly impact the price. A less liquid trading market may
adversely impact the value of the FLEX Options and your units.
Valuation Risk. Under certain circumstances, current market
prices may not be available with respect to the FLEX Options.
Under those circumstances, the value of the FLEX Options will
require more reliance on the judgment of the evaluator than that
required for securities for which there is an active trading
market. This creates a risk of mispricing or improper valuation
of the FLEX Options, which could impact the value received or
paid for units.
Proportional Relationship Risk. In the unlikely event the trust
is unable to maintain the proportional relationship of the FLEX
Options, it will be unable to achieve its objective.
o Exchange-Traded Fund Risk. Certain features of the ETF, which is an
exchange-traded fund, will impact the value of the units. The value of
the ETF is subject to the following factors:
Passive Investment Risk. The ETF is not actively managed and
attempts to track the performance of an unmanaged index of
securities. This differs from an actively managed fund, which
typically seeks to outperform a benchmark index. As a result, the
ETF will hold constituent securities of the Index regardless of
the current or projected performance on a specific security or
particular industry or market sector. Maintaining investments in
the securities regardless of market conditions of the performance
of individual securities could impact the unit price of the ETF,
the FLEX Options and the trust units.
Tracking Error. Exchange-traded funds face index correlation
risk, which is the risk that the performance of an
exchange-traded fund will vary from the actual performance of the
target index, known as "tracking error." The performance of the
ETF may not replicate the performance of, and may underperform,
the Index. It is possible that the ETF may not fully replicate or
may, in certain circumstances, diverge significantly from the
performance of the Index due to the ETF not investing in all
stocks comprising the Index, temporary unavailability of certain
securities in the secondary market, differences in trading hours
between the ETF and securities comprising the Index, the
occurrence of corporate actions (mergers and spinoffs), or other
circumstances. Because the return or loss on the FLEX Options
references the price performance of the ETF and not the Index,
the return or loss on the FLEX Options and your units may be less
than that of an alternative investment linked directly to the
Index.
Fees and Expenses. Unlike the Index, the ETF will reflect
transaction costs and fees that will reduce its price performance
relative to the Index.
Discount. Shares of exchange-traded funds tend to trade at a
discount from their net asset value.
o Treasury Obligations Risk. The trust is exposed to certain risks
associated with its investments in Treasury Obligations. No one can
predict whether interest rates will rise or fall in the future.
Treasury Obligations are direct obligations of the United States that
are backed by the full faith and credit of the United States. The
value of the Treasury Obligations will be adversely affected by
decreases in bond prices and increases in interest rates. Certain
Treasury Obligations may have been purchased on the trust's inception
date at prices lower than their par value at maturity, indicating a
market discount. Certain Treasury Obligations may have been purchased
on the trust's inception date at prices greater than their par value
at maturity, indicating a market premium. Generally, the value of
bonds purchased at a market discount will increase in value faster
than bonds purchased at a market premium, if interest rates decrease.
Conversely, if interest rates increase, the value of bonds purchased
at a market discount will decrease faster than bonds purchased at a
market premium.
Distributions of interest from the Treasury Obligations may be
insufficient to meet any or all expenses of the trust. If the cash
balances in the income and capital accounts are insufficient to
provide for expenses and other amounts payable by the trust, the trust
may sell trust investments to make such payments. These sales may
result in losses to unitholders and the inability of the trust to meet
its investment objective.
o Dilution Risk. You could experience a dilution of your investment if
we increase the size of the trust as we sell units. There is no
assurance that your investment will maintain its proportionate share
in the trust's profits and losses, or that your investment will be in
the same portfolio for the duration of the trust.
o Selection Risk. Securities selected according to this strategy may not
perform as intended. The trust is exposed to additional risk due to
its policy of investing in accordance with an investment strategy.
Although the trust's investment strategy is designed to achieve the
trust's investment objective, the strategy may not prove to be
successful. The investment decisions may not produce the intended
results and there is no guarantee that the investment objective will
be achieved.
o Legislation and Litigation Risk. From time to time, various
legislative initiatives or regulatory standards are proposed in the
United States and abroad which may have a negative impact on the ETF,
the Index or the securities comprising the Index. In addition,
litigation regarding any of the issuers of the securities, or of the
industries represented by such issuers, may negatively impact the
value of these securities. We cannot predict what impact any pending
or proposed legislation or pending or threatened litigation will have
on the value of the securities.
o Inflation Risk. Inflation risk is the risk that the value of assets or
income from investments will be less in the future as inflation
decreases the value of money.
See "Investment Risks" in Part A of the prospectus and "Risk Factors" in
Part B of the prospectus for additional information.
Who Should Invest
You should consider this investment if:
o You want to own securities representing interests in written and
purchased option contracts and Treasury Obligations in a single
investment.
o You seek the potential for enhanced capital appreciation on the ETF
subject to a capped return.
You should not consider this investment if:
o You are uncomfortable with the risks of an unmanaged investment in
written and purchased option contracts and Treasury Obligations.
o You are uncomfortable with exposure to the risks associated with the
FLEX Options.
o You are uncomfortable with exposure to the price performance of the
ETF.
o You are seeking unlimited capital appreciation potential and do not
want potential returns capped.
o [You are uncomfortable with not receiving any income or periodic
distributions.]
Fees and Expenses
The amounts below are estimates of the direct and indirect fees and
expenses that you may incur based on a $10 unit price. Actual expenses may vary.
Percentage
of Public Amount Per
Offering $1,000
Investor Fees Price (5) Invested
---------------------------- ----------- -----------
Initial sales fee
paid on purchase (1) % $ _____
Deferred sales fee (2)
----------- -----------
Creation and
development fee (3)
----------- -----------
Maximum sales fees
(including creation
and development fee) % $ _____
=========== ===========
Redemption fee (4)
(as a percentage of proceeds
of trust units redeemed) % $ _____
Estimated organization costs
(amount per 100 units paid
by the trust at the end of the
initial offering period or
after six months, at the
discretion of the sponsor) $ _____
===========
Approximate
Annual Fund % of Public
Operating Offering Amount Per
Expenses Price (5) 100 Units
---------------------------- ----------- -----------
Trustee's fee % $ _____
Sponsor's supervisory fee _____ _____
Evaluator's fee _____ _____
Bookkeeping and
administrative fee _____ _____
Estimated other trust
operating expenses (6)
----------- -----------
Total % $ _____
=========== ===========
(1) The initial sales fee provided above is based on the unit price on the
Inception Date. Because the initial sales fee equals the difference between
the maximum sales fee and the sum of the remaining deferred sales fee and
the creation and development fee ("C&D Fee") (as described below), the
percentage and dollar amount of the initial sales fee will vary as the unit
price varies and after deferred fees begin. Despite the variability of the
initial sales fee, each investor is obligated to pay the entire applicable
maximum sales fee.
(2) The deferred sales fee is fixed at $_____ per unit and is deducted in
monthly installments of $_____ per unit on the last business day of _____
2017 and _____ 2017 and $_____ per unit on the last business day of _____
2017. The percentage provided is based on a $10 per unit Public Offering
Price as of the Inception Date and the percentage amount will vary over
time. If units are redeemed prior to the deferred sales fee period, the
entire deferred sales fee will be collected.
(3) The C&D Fee compensates the sponsor for creating and developing your trust.
The actual C&D Fee is $___ per unit and is paid to the sponsor at the close
of the initial offering period, which is expected to be approximately [six]
months from the Inception Date. The percentages provided are based on a $10
unit as of the Inception Date and the percentage amount will vary over
time. If the unit price exceeds $10.00 per unit, the C&D Fee will be less
than ___% of the Public Offering Price; if the unit price is less than
$10.00 per unit, the C&D Fee will exceed ___% of the Public Offering Price.
However, in no event will the maximum sales fee exceed ___% of a
unitholder's initial investment.
(4) In order to reduce the impact of redemptions on the investors remaining in
the trust, the trust will charge a redemption fee.
(5) Based on 100 units with a $10.00 per unit Public Offering Price as of the
Inception Date.
(6) The estimated trust operating expenses are based upon an estimated trust
size of approximately $__ million. Because certain of the operating
expenses are fixed amounts, if the trust does not reach such estimated size
or falls below the estimated size over its life, the actual amount of the
operating expenses may exceed the amounts reflected. In some cases, the
actual amount of the operating expenses may greatly exceed the amounts
reflected. Other operating expenses do not include brokerage costs and
other transactional fees.
Example
This example helps you compare the costs of this trust with other unit
trusts and mutual funds. In the example we assume that you reinvest your
investment in a new trust every other year at a reduced sales charge, the
trust's operating expenses do not change and the trust's annual return is 5%.
Your actual returns and expenses will vary. Based on these assumptions, you
would pay these expenses for every $10,000 you invest:
1 year $
2 years (Life of the trust)
These amounts are the same regardless of whether you sell your investment
at the end of a period or continue to hold your investment. The example does not
consider any brokerage fees the trust pays or any transaction fees that
broker-dealers may charge for processing redemption requests.
See "Expenses of the Trust" in Part B of the prospectus for additional
information.
Trust Portfolio
Guggenheim Defined Portfolios, Series 1561
Guggenheim SPY Accelerated Return Trust, Series 1
The Trust Portfolio as of the Inception Date, _______, 2017
---------------------------------------------------------------------------------------------------------
STRIKE PERCENTAGE
PRICE AS OF
PERCENTAGE AGGREGATE MARKET MARKET
DESCRIPTION OF INITIAL OFFERING NUMBER OF VALUE PER VALUE TO
OF OPTIONS(1) VALUE PRICE CONTRACTS CONTRACT(2) TRUST(2)
---------------------------------------------------------------------------------------------------------
FLEX OPTIONS-__%(3)
Purchased Options-__%
Purchased Call Options on SPDR[R]
S&P 500[R] ETF Trust,
Expire [_______](4) [__]% _______% $ ________ $
Written Options-__%
Written Put Options on SPDR[R]
S&P 500[R] ETF Trust,
Expire [_______](4) [__]% _______% $ ________ $
Written Call Options on SPDR[R]
S&P 500[R] ETF Trust,
Expire [______] [__]% _______% $ ________ $
------------
TOTAL OPTIONS _______% $
============
---------------------------------------------------------------------------------------------------------
PERCENTAGE
OF
AGGREGATE MARKET
DESCRIPTION OF OFFERING VALUE TO
TREASURY OBLIGATIONS (4) PRICE PAR VALUE TRUST
---------------------------------------------------------------------------------------------------------
TREASURY OBLIGATIONS-___%
[____]% $ ________
============
(1) Securities are represented by contracts to purchase securities.
(2) The value of FLEX Options is based on the last quoted sale price where
readily available and appropriate. In cases where the FLEX Options are not
traded on the valuation date or where the evaluator determines that market
quotations are unavailable or inappropriate (e.g., due to infrequent
transactions or thin trading), the value of the FLEX Options is based on
the last asked or bid price in the over-the-counter market if available
and appropriate. During the initial offering period such determination for
the Purchased Options is generally be on the basis of ask prices and for
the Written Options is generally be on the basis of bid prices. After the
initial offering period ends, such determination for the Purchased Options
will generally be on the basis of bid prices and for the Written Options
will generally be on the basis of ask prices.
If market quotes, ask prices and bid prices are unavailable or
inappropriate (e.g., due to infrequent transactions or thin trading), each
FLEX Option's value is based on the evaluator's good faith determination of
the fair value of the FLEX Options at its reasonable discretion. To
determine the fair value of the FLEX Options, where available, the
evaluator starts with values generated using the CBOE's Customized Option
Pricing Service ("COPS"), which generates valuations based on the average
valuations of multiple market making contributors. Where such values are
not available through COPS, the evaluator will use the OCC's Flex Reports,
which are model-based valuations made available by OCC. Where such values
are not available and to assess the reasonableness of the above valuations,
the evaluator will generate its own model-based valuations of the FLEX
Options, including using the Black-Scholes model for option valuation, and
use current market quotations and ask/bid prices for comparable listed
options that are more actively traded.
Account Standards Codification 820, "Fair Value Measurements" establishes a
framework for measuring fair value and expands disclosure about fair value
measurements in financial statements for the trust. The framework under the
standard is comprised of a fair value hierarchy, which requires an entity
to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. The standard describes three
levels of inputs that may be used to measure fair value: Level 1: Quote
prices (unadjusted) for identical assets or liabilities in active markets
that the trust has the ability to access as of the measurement date.
Level 2: Significant observable inputs other than Level 1 prices, such as
quoted prices for similar assets or liabilities, quoted prices in markets
that are not active, and other inputs that are observable or can be
corroborated by observable market data.
Level 3: Significant unobservable inputs that reflect on the trust's own
assumptions about the assumptions that market participants would use in
pricing an asset or liability.
The inputs or methodologies used for valuing securities are not necessarily
an indication of the risk associated with investing in those securities.
Changes in valuation techniques may result in transfers in or out of an
investment's assigned level as described above.
The following table summarizes the trust's investment in the FLEX Options
as of the trust's inception, based on inputs used to value them:
LEVEL 1 LEVEL 2 LEVEL 3
--------------------------------------------------------------------------------
Purchased Options $______ $______ $____
Written Options $______ $______ $____
--------------------------------------------------------------------------------
TOTAL $______ $______ $____
--------------------------------------------------------------------------------
The cost of the securities to the sponsor and the sponsor's profit or
(loss) are $________ and $________, respectively, [_________]
(3) Each FLEX Option entitles the holder thereof (i.e., the purchaser of the
FLEX Option) to purchase (for the call options) or sell (for the put
options) 100 shares of the ETF at the applicable strike price.
(4) The Treasury Obligations are represented by contracts to purchase such
securities the performance of which is secured by an irrevocable letter of
credit. Contracts to acquire these securities were entered into on _______,
2017, and have an expected settlement date of _______, 2017. A portion of
the Treasury Obligations is pledged as collateral in order to secure the
trust's obligation to pay amounts payable by the trust on the Written Put
Options in excess of the amounts received by the trust on the Purchased
Call Options.
(5) A Treasury Obligation issued at an original issue discount.
(6) This is a non-income-producing security.
================================================================================
UNDERSTANDING YOUR INVESTMENT
How to Buy Units
You can buy units of your trust on any business day by contacting your
financial professional. Public offering prices of units are available daily on
the Internet at www.guggenheiminvestments.com. The unit price includes:
o the value of the securities,
o organization costs,
o the maximum sales fee (which includes an initial sales fee, a deferred
sales fee and the creation and development fee), and
o cash and other net assets in the portfolio.
We often refer to the purchase price of units as the "offer price" or the
"Public Offering Price." We must receive your order to buy units prior to the
close of the New York Stock Exchange (normally 4:00 p.m. Eastern time) to give
you the price for that day. If we receive your order after this time, you will
receive the price computed on the next business day.
[Accrued Interest. Accrued interest on the trust units consists of two
elements. The first element arises as a result of accrued interest which is the
accumulation of unpaid interest on the Treasury Obligations in the trust from
the last day on which interest was paid on the Treasury Obligations. Interest on
the Treasury Obligations is generally paid semi-annually, although the trust
accrues such interest daily. Because the trust always has an amount of interest
earned but not yet collected, the public offering price of units will include
the proportionate share of accrued interest to the date of settlement. The
second element of accrued interest arises because of the structure of the
trust's interest account. The trustee has no cash for distribution to
unitholders until it receives interest payments on the Treasury Obligations in
the trust and may be required to advance its own funds to make trust interest
distributions, if there are any to be made. As a result, interest account
balances are established to limit the need for the trustee to advance funds in
connection with such interest distributions, if any. If you sell or redeem your
units your sales and redemption price will include a proportionate share of the
accrued interest from the purchaser of your units.]
Value of the Securities. The sponsor determines the value of the
securities as of the close of regular trading on the New York Stock Exchange on
each day that the exchange is open. We generally seek to determine the value of
the FLEX Options using the last quoted sale price for the FLEX Options where
readily available and appropriate. In cases where the FLEX Options are not
traded on the valuation date or where we determine that market quotations are
unavailable or inappropriate (e.g., due to infrequent transactions or thin
trading), we will generally value the FLEX Options based on the last asked or
bid price in the over-the-counter market if available and appropriate. During
the initial offering period such determination for the Written Put Options will
generally be on the basis of bid prices. After the initial offering period
ends, such determination for the Written Put Options will generally be on the
basis of ask prices.
If market quotes, ask prices and bid prices are unavailable or
inappropriate (e.g., due to infrequent transactions or thin trading), we will
determine each FLEX Option's value based on our good faith determination of the
fair value of the FLEX Options at our reasonable discretion. To determine the
fair value of the FLEX Options, where available, we will start with values
generated using the CBOE's COPS, which generates valuations based on the average
valuations of multiple market making contributors. Where such values are not
available through COPS, we will use the OCC's Flex Reports, which are
model-based valuations made available by OCC. Where such values are not
available and to assess the reasonableness of the above valuations, we will
generate our own model-based valuations of the FLEX Options, including using the
Black-Scholes model for option valuation, and use current market quotations and
ask/bid prices for comparable listed options that are more actively traded.
The ask side price generally represents the price at which dealers,
market-makers or investors in the market are willing to sell a security and the
bid side evaluation generally represents the price that dealers, market-makers
or investors in the market are willing to pay to buy a security. The bid side
evaluation is lower than the ask side evaluation. As a result of this pricing
method, unitholders should expect a decrease in the net asset value per unit on
the day following the end of the initial offering period equal to the
difference between the current ask side evaluation and bid side evaluation of
the FLEX Options.
We generally determine the value of the Treasury Obligations during the
initial offering period based on the aggregate offering side evaluations of the
Treasury Obligations determined (i) on the basis of current offering prices of
the Treasury Obligations; (ii) if offering prices are not available for any
particular Treasury Obligation, on the basis of current offering prices for
comparable securities; (iii) by determining the value of the Treasury
Obligations on the offer side of the market by appraisal; or (iv) by any
combination of the above. After the initial offering period ends, we generally
determine the value of the Treasury Obligations and FLEX Options as described
above based on the bid side evaluations rather than the offering side
evaluations. The offering side price generally represents the price at which
dealers, market-makers or investors in the market are willing to sell a
security, and the bid side evaluation generally represents the price that
dealers, market-makers or investors in the market are willing to pay to buy a
security. The bid side evaluation is lower than the offering side evaluation. As
a result of this pricing method, unitholders should expect a decrease in the net
asset value per unit on the day following the end of the initial offering period
equal to the difference between the current offering side evaluation and bid
side evaluation of the Treasury Obligations.
We determined the initial prices of the securities shown under "Trust
Portfolio" in this prospectus on the date of this prospectus. On the first day
we sell units we will compute the unit price at the time the registration
statement filed with the Securities and Exchange Commission becomes effective
Organization Costs. During the initial offering period, part of your
purchase price includes a per unit amount sufficient to reimburse us for some
or all of the costs of creating your trust. These costs include the costs of
preparing the registration statement and legal documents, legal fees, federal
and state registration fees, the portfolio consulting fee, if applicable, and
the initial fees and expenses of the trustee. Your trust will sell securities
to reimburse us for these costs at the end of the initial offering period or
after six months, at the discretion of the sponsor. Organization costs will not
exceed the estimate set forth under "Fees and Expenses."
Transactional Sales Fee. You pay a fee when you buy units. We refer to
this fee as the "transactional sales fee." The transactional sales fee has both
an initial and a deferred component and is ___% of the Public Offering Price
based on a $10 unit. The percentage amount of the transactional sales fee is
based on the unit price on the Inception Date. Because the transactional sales
fee equals the difference between the maximum sales fee and the C&D Fee, the
percentage and dollar amount of the transactional sales fee will vary as the
unit price varies.
The transactional sales fee does not include the C&D Fee which is
described under "Expenses of the Trust" in Part B of the prospectus and in
"Fees and Expenses" in Part A of the prospectus.
Initial Sales Fee. Based on a $10 unit, the initial sales fee is initially
1% of the Public Offering Price. The initial sales fee, which you will pay at
the time of purchase, is equal to the difference between the maximum sales fee
(____% of the Public Offering Price) and the sum of the maximum remaining
deferred sales fees and the C&D Fee (initially $___ per unit). The dollar
amount and percentage amount of the initial sales fee will vary over time.
Deferred Sales Fee. We defer payment of the rest of the transactional
sales fee through the deferred sales fee ($___ per unit). You pay any remaining
deferred sales fee when you sell or redeem units. The trust may sell securities
to meet the trust's obligations with respect to the deferred sales fee. Thus,
no assurance can be given that the trust will retain its present size and
composition for any length of time.
In limited circumstances and only if deemed in the best interests of
unitholders, the sponsor may delay the payment of the deferred sales fee from
the dates listed under "Fees and Expenses."
Reducing Your Sales Fee. We offer a variety of ways for you to reduce the
maximum sales fee you pay. It is your financial professional's responsibility
to alert us of any discount when you order units. Since the deferred sales fee
and the C&D Fee are a fixed dollar amount per unit, your trust must charge the
deferred sales fee and the C&D Fee per unit regardless of any discounts.
However, when you purchase units of your trust, if you are eligible to receive
a discount such that your total maximum sales fee is less than the fixed dollar
amount of the deferred sales fee and the C&D Fee, the sponsor will credit you
the difference between your maximum sales fee and the sum of the deferred sales
fee and the C&D Fee at the time you buy units by providing you with additional
units.
Large Purchases. You can reduce your maximum sales fee by increasing the
size of your investment.
Investors who make large purchases are entitled to the following sales
charge reductions:
Sales Charge
Reductions (as a
% of the Public
Purchase Amount Offering Price)
------------------- ------------------
Less than $50,000 0.00%
$50,000 - $99,999 ____
$100,000 - $249,999 ____
$250,000 - $499,999 ____
$500,000 - $999,999 ____
$1,000,000 or more
Aggregate unit purchases of any Guggenheim Funds trust by the same person
on any single day from any one broker-dealer qualify for a purchase level. You
can include these purchases as your own for purposes of this aggregation:
o purchases by your spouse or children under the age of 21 living in the
same household, and
o purchases by your trust estate or fiduciary accounts.
The discounts described above apply only during the initial offering
period.
There can be no assurance that the sponsor will create future trusts with
investment strategies similar to your trust or that may fit within your
investment parameters.
Advisory and Fee Accounts. We eliminate your transactional sales fee for
purchases made through registered investment advisers, certified financial
planners or registered broker-dealers who charge periodic fees in lieu of
commissions or who charge for financial planning or for investment advisory or
asset management services or provide these services as part of an investment
account where a comprehensive "wrap fee" is imposed (a "Fee Account").
This discount applies during the initial offering period and in the
secondary market. Your financial professional may purchase units with the Fee
Account CUSIP numbers to facilitate purchases under this discount; however, we
do not require that you buy units with these CUSIP numbers to qualify for the
discount. If you purchase units with these special CUSIP numbers, you should be
aware that you may have the distributions automatically reinvest into additional
units of your trust or receive cash distributions. We reserve the right to limit
or deny purchases of units not subject to the transactional sales fee by
investors whose frequent trading activity we determine to be detrimental to your
trust. We, as sponsor, will receive and you will pay the C&D Fee. See "Expenses
of the Trust" in Part B of the prospectus for additional information.
Exchange or Rollover Option. If you are buying units of the trust in the
primary market with redemption or termination proceeds from any unit trust, you
may purchase units at 99% of the maximum Public Offering Price, which may
include an up-front sales fee and a deferred sales fee. To qualify for this
sales charge reduction, the termination or redemption proceeds being used to
purchase units of the trust must be no more than 30 days old. Such purchases
entitled to this sales charge reduction may be classified as "Rollover
Purchases." An exchange or rollover is generally treated as a sale for federal
income tax purposes. See "Taxes" in Part B of the prospectus.
Rollover Purchases are also subject to the C&D Fee. See "Expenses of the
Trust" in Part B of the prospectus.
Employees. We do not charge the portion of the transactional sales fee
that we would normally pay to your financial professional for purchases made by
officers, directors and employees and their family members (spouses, children
under the age of 21 living in the same household and parents) of Guggenheim
Funds and its affiliates, or by employees of selling firms and their family
members (spouses, children under the age of 21 living in the same household and
parents). You pay only the portion of the fee that the sponsor retains. Such
purchases are also subject to the C&D Fee. This discount applies during the
initial offering period and in the secondary market. Only those broker-dealers
that allow their employees to participate in employee discount programs will be
eligible for this discount.
[Distribution Reinvestment Plan. We do not charge any transactional sales
fee when you reinvest distributions from your trust into additional units of the
trust. Since the deferred sales fee is a fixed dollar amount per unit, your
trust must charge the deferred sales fee per unit regardless of this discount.
If you elect the distribution reinvestment plan, we will credit you with
additional units with a dollar value sufficient to cover the amount of any
remaining deferred sales fee that will be collected on such units at the time of
reinvestment. The dollar value of these units will fluctuate over time. This
discount applies during the initial offering period and in the secondary
market.]
See "Purchase, Redemption and Pricing of Units" in Part B of the
prospectus for more information regarding buying units.
How We Distribute Units. We sell units to the public through
broker-dealers and other firms. We pay part of the sales fee you pay to these
distribution firms when they sell units. The distribution fee paid for a given
transaction is as follows:
Concession
per Unit (as a
Purchase Amount/ % of the Public
Form of Purchase Offering Price)
-------------------- -----------------
Less than $50,000 %
$50,000 - $99,999 ____
$100,000 - $249,999 ____
$250,000 - $499,999 ____
$500,000 - $999,999 ____
$1,000,000 or more ____
Rollover Purchases ____
Fee Account and
Employee Purchases 0.00
We apply these amounts as a percent of the unit price per transaction at
the time of the transaction.
Broker-dealers and other firms that sell units of certain Guggenheim Funds
unit trusts are eligible to receive additional compensation for volume sales.
Such payments will be in addition to the regular concessions paid to dealer
firms as set forth in the applicable trust's prospectus. The additional
payments will be as follows:
Primary Offering Additional
Period Sales During Volume
Calendar Quarter Concession
---------------------------- ------------
$0 but less than $10 million 0.000%
$10 million but
less than $25 million _____
$25 million but
less than $50 million _____
$50 million or more _____
Eligible unit trusts include all Guggenheim Funds unit trusts sold in the
primary market. Redemptions of units during the primary offering period will
reduce the amount of units used to calculate the volume concessions. In
addition, dealer firms will not receive volume concessions on the sale of units
which are not subject to a transactional sales fee. However, such sales will be
included in determining whether a firm has met the sales level breakpoints for
volume concessions.
Guggenheim Funds reserves the right to modify or terminate the volume
concession program at any time. The sponsor may also pay to certain dealers an
administrative fee for information or service used in connection with the
distribution of trust units. Such amounts will be in addition to any
concessions received for the sale of units.
In addition to the concessions described above, the sponsor may pay
additional compensation out of its own assets to broker-dealers that meet
certain sales targets and that have agreed to provide services relating to the
trust to their customers.
Other Compensation and Benefits to Broker-Dealers. The sponsor, at its own
expense and out of its own profits, may provide additional compensation and
benefits to broker-dealers who sell shares of units of your trust and other
Guggenheim Funds products. This compensation is intended to result in
additional sales of Guggenheim Funds products and/or compensate broker-dealers
and financial advisors for past sales. A number of factors are considered in
determining whether to pay these additional amounts. Such factors may include,
but are not limited to, the level or type of services provided by the
intermediary, the level or expected level of sales of Guggenheim Funds products
by the intermediary or its agents, the placing of Guggenheim Funds products on
a preferred or recommended product list, access to an intermediary's personnel,
and other factors.
The sponsor makes these payments for marketing, promotional or related
expenses, including, but not limited to, expenses of entertaining retail
customers and financial advisers, advertising, sponsorship of events or
seminars, obtaining information about the breakdown of unit sales among an
intermediary's representatives or offices, obtaining shelf space in
broker-dealer firms and similar activities designed to promote the sale of the
sponsor's products. The sponsor may make such payments to many intermediaries
that sell Guggenheim Funds products. The sponsor may also make certain payments
to, or on behalf of, intermediaries to defray a portion of their costs incurred
for the purpose of facilitating unit sales, such as the costs of developing
trading or purchasing trading systems to process unit trades.
Payments of such additional compensation, some of which may be
characterized as "revenue sharing," may create an incentive for financial
intermediaries and their agents to sell or recommend a Guggenheim Funds
product, including the trust, over products offered by other sponsors or fund
companies. These arrangements will not change the price you pay for your
units.
We generally register units for sale in various states in the United
States. We do not register units for sale in any foreign country. It is your
financial professional's responsibility to make sure that units are registered
or exempt from registration if you are a foreign investor or if you want to buy
units in another country. This prospectus does not constitute an offer of units
in any state or country where units cannot be offered or sold lawfully. We may
reject any order for units in whole or in part.
We may gain or lose money when we hold units in the primary or secondary
market due to fluctuations in unit prices. The gain or loss is equal to the
difference between the price we pay for units and the price at which we sell or
redeem them. We may also gain or lose money when we deposit securities to
create units. For example, we lost the amount set forth in the trust's "Trust
Portfolio" on the initial deposit of securities into the trust.
See "Purchase, Redemption and Pricing of Units" in Part B of the
prospectus for additional information.
How to Sell Your Units
You can sell your units on any business day by contacting your financial
professional or, in some cases, the trustee. Unit prices are available daily on
the Internet at www.guggenheiminvestments.com or through your financial
professional. We often refer to the sale price of units as the "liquidation
price." You pay any remaining deferred sales fee when you sell or redeem your
units. In addition, the proceeds of units redeemed will be charged a redemption
fee of __% of the total redemption proceeds, which will be payable to the trust
for the purpose of reducing the impact of the redemption on the investors
remaining in the trust. Certain broker-dealers may charge a transaction fee for
processing unit redemptions or sale requests.
Until the end of the initial offering period or six months after the
Inception Date, at the discretion of the sponsor, the price at which the
trustee will redeem units and the price at which the sponsor may repurchase
units include estimated organization costs. After such period, the amount paid
will not include such estimated organization costs. If units of the trust are
redeemed prior to the deferred sales fee period, the entire deferred sales fee
will be collected.
Selling Units. We do not intend to but may maintain a secondary market for
units. This means that if you want to sell your units, we may buy them at the
current price which is based on their net asset value. We may then resell the
units to other investors at the Public Offering Price or redeem them for the
redemption price. Our secondary market repurchase price is generally the same
as the redemption price. Certain broker-dealers might also maintain a secondary
market in units. You should contact your financial professional for current
unit prices to determine the best price available. We may discontinue our
secondary market at any time without notice. Even if we do not make a market,
you will be able to redeem your units with the trustee on any business day for
the current price.
Redeeming Units. You may also be able to redeem your units directly with
the trustee, The Bank of New York Mellon, on any day the New York Stock Exchange
is open. The trustee must receive your completed redemption request prior to the
close of the New York Stock Exchange for you to receive the unit price for a
particular day. (For what constitutes a completed redemption request, see
"Purchase, Redemption and Pricing of Units--Redemption" in Part B of the
prospectus.) If your request is received after that time or is incomplete in any
way, you will receive the next price computed after the trustee receives your
completed request. Rather than contacting the trustee directly, your financial
professional may also be able to redeem your units by using the Investors'
Voluntary Redemptions and Sales (IVORS) automated redemption service offered
through Depository Trust Company.
If you redeem your units, the trustee will generally send you a payment
for your units no later than three business days after it receives all
necessary documentation. At the sponsor's discretion, certain redemptions may
be made by an in-kind distribution of the securities underlying the units in
lieu of cash.
You can generally request an in-kind distribution of the securities
underlying your units if you own units worth at least $25,000 or you originally
paid at least that amount for your units. This option is generally available
only for securities traded and held in the United States and is not available
within 30 business days of the trust's termination. We may modify or
discontinue this option at any time without notice.
Exchange Option. You may be able to exchange your units for units of other
Guggenheim Funds unit trusts at a reduced sales fee. You can contact your
financial professional or Guggenheim Funds for more information about trusts
currently available for exchanges. Before you exchange units, you should read
the prospectus carefully and understand the risks and fees. You should then
discuss this option with your financial professional to determine whether your
investment goals have changed, whether current trusts suit you and to discuss
tax consequences. To qualify for a reduced sales fee, you may need to meet
certain criteria. We may discontinue this option at any time.
For more complete information regarding selling or redeeming your units,
see "Purchase, Redemption and Pricing of Units" in Part B of the prospectus.
Distributions
[Distributions. Your trust generally pays distributions from its net
investment income, if any, along with any excess capital on each distribution
date to unitholders of record on the preceding record date. You can elect to:
o reinvest distributions in additional units of your trust at no fee, or
o receive distributions in cash.
You may change your election by contacting your financial professional or
the trustee. Once you elect to participate in a reinvestment program, the
trustee will automatically reinvest your distributions into additional units at
their net asset value three business days prior to the distribution date. We
waive the sales fee for reinvestments into units of your trust. We cannot
guarantee that units will always be available for reinvestment. If units are
unavailable, you will receive cash distributions. We may discontinue these
options at any time without notice.
In some cases, your trust might pay a special distribution if it holds an
excessive amount of principal pending distribution. For example, this could
happen as a result of a merger or similar transaction involving a company whose
security is in your portfolio. In addition, your trust may pay a special
distribution in order to maintain the qualification of the trust as a regulated
investment company or to provide funds to make any distribution for a taxable
year in order to avoid imposition of any income or excise tax on undistributed
income in the trust. The amount of your distributions will vary from time to
time as companies change their dividends, trust expenses change or as a result
of changes in the trust's portfolio.
Reinvest in Your Trust. You can keep your money working by electing to
reinvest your distributions in additional units of your trust. The easiest way
to do this is to have your financial professional purchase units with one of
the Reinvestment CUSIP numbers listed in the "Investment Summary" section of
this prospectus. You may also make or change your election by contacting your
financial professional or the trustee. This reinvestment option may be subject
to availability or limitation by the broker-dealer or selling firm. In certain
circumstances, broker-dealers may suspend or terminate the offering of a
reinvestment option at any time.
Reports. The trustee will send your financial professional a statement
showing income and other receipts of your trust for each distribution. Each
year the trustee will also provide an annual report on your trust's activity
and certain tax information. You can request copies of security evaluations to
enable you to complete your tax forms and audited financial statements for your
trust, if available.]
See "Administration of the Trust" in Part B of the prospectus for
additional information.
Investment Risks
All investments involve risk. This section describes the main risks that
can impact the value of the securities in your trust. You should understand
these risks before you invest. You could lose some or all of your investment in
the trust. If the value of the securities falls, the value of your units will
also fall. We cannot guarantee that your trust will achieve its objective or
that your investment return will be positive over any period.
Passive Investment Risk. The value of your investment may fall over time.
The trust will generally hold, and may continue to buy, the same securities
even though a security's outlook, rating, market value or yield may have
changed.
Market Risk. Market risk is the risk that a particular security in the
trust, the trust itself or securities in general may fall in value. Market
value may be affected by a variety of factors, including general securities
markets movements, changes in the financial condition of an issuer or a sector,
changes in perceptions about an issuer or a sector, interest rates and
inflation and governmental policies and litigation.
Although we carefully supervise your portfolio, you should remember that
we do not manage the portfolio. Your trust will not sell a security solely
because the market value falls, as is possible in a managed fund.
Performance Trigger Risk. The application of the predetermined trigger may
result in the trust terminating at a price below what may have been possible if
the trigger were not in place. In addition, investors may be subject to adverse
tax consequences and possibly short-term capital gains rates as a result of the
application of the trigger.
Furthermore, the net proceeds from the liquidation may be more or less
than the amount calculated on the Performance Trigger Day due to market
conditions and because the trustee may be unable to liquidate the trust's
holdings at the same price used to calculate the net asset value on the
Performance Trigger Day.
Capped Upside and No Downside Protection. The target return for units
purchased on the trust's inception date and held for the life of the trust is
based on the price performance of the ETF, is subject to a capped amount. Even
if there are significant increases in the price performance of the ETF, the
amounts you may receive are capped. Unitholders may experience significant
losses on their investment up to a total loss of your investment if the price
of shares of the ETF declines.
You may realize a return that is higher or lower than the intended returns
or losses as a result of redeeming units prior to the Mandatory Termination
Date, where the FLEX Options or the Treasury Obligations are otherwise
liquidated by the trust prior to expiration, if a Corporate Action occurs with
respect to the ETF, or if there are increases in potential tax-related expenses
and other expenses of the trust above estimated levels.
Options Risk. The value of the FLEX Options will be affected by changes in
the price of the ETF, the value of the Index and its underlying securities,
changes in interest rates, changes in the actual and perceived volatility of the
stock market and the ETF, Index and the underlying securities and the remaining
time to the Option Expiration Date. The value of the FLEX Options does not
increase and decrease at the same rate as the price of shares of the ETF
(although they generally move in the same direction). However, as a FLEX Option
approaches its expiration date, its value increasingly moves with the value of
the Index. The value of the Written Options reduces the value of your units. The
Written Options create an obligation to potentially make a payment in contrast
to the Purchased Option, which creates an obligation to potentially receive a
payment. As the value of the Written Options contracts increase, it has a
negative impact on the value of your units.
When the trust buys option contracts, the value of your units increases,
but if the value of these options contracts decreases, it has a negative impact
on the value of your units. The trust may experience substantial downside from
specific option contracts positions, and certain option contract positions may
expire worthless.
Underlying ETF Performance and Equity Risk. The FLEX Options contracts
represent indirect positions in the ETF and are subject to changes in value as
the price of shares of the ETF rises or falls. The settlement value of the FLEX
Options is based on the ETF Closing Value on the Option Expiration Date, and
will be substantially determined by market conditions and the price of shares
of the ETF, the value of the Index and the value of securities comprising the
Index as of such time. The value of the ETF will fluctuate over time based on
changes in the value of the stocks held by the ETF, which may be impacted by
changes in general economic conditions, expectations for future economic growth
and corporate profits, interest rates and the supply and demand for
small-capitalization stocks in the United States. The value of the trust does
not appreciate due to dividend payments by the ETF. The trust seeks to provide
target returns or losses on the price performance of the ETF.
Although common stocks have historically generated higher average returns
than fixed-income securities over the long term, common stocks also have
experienced significantly more volatile returns. Common stocks are structurally
subordinated to preferred stocks, bonds and other debt instruments in a
company's capital structure and represent a residual claim on the issuer's
assets that have no value unless such assets are sufficient to cover all other
claims.
Unitholders will not have control, voting rights or rights to receive cash
dividends or other distributions or other rights that holders of a direct
investment in the ETF would have.
Credit Risk. An issuer, guarantor or counterparty of a security in the
trust may be unable or unwilling to meet its obligation on the security. The
OCC acts as guarantor and central counterparty with respect to the FLEX
Options. As a result, the ability of the trust to meet its objective depends on
the OCC being able to meet its obligations.
Exchange-Traded Funds. The FLEX Options reference the price performance of
the ETF, which is an exchange-traded fund. Shares of exchange-traded funds
frequently trade at a discount from their net asset value in the secondary
market. This risk is separate and distinct from the risk that the net asset
value of fund shares may decrease. The amount of such discount from net asset
value is subject to change from time to time in response to various factors.
Exchange-traded funds are subject to the risk of an inability to meet the
exchange-traded fund's investment objective. The FLEX Options reference the
price performance of the ETF, which is adversely impacted by its operating
expenses.
Exchange-traded funds also face index correlation risk which is the risk
that the performance of an exchange-traded fund will vary from the actual
performance of the exchange-traded fund's target index, known as "tracking
error." This can happen due to transaction costs, market impact, corporate
actions (mergers and spinoffs) and timing variances.
Selection Risk. Securities selected according to this strategy may not
perform as intended. The trust is exposed to additional risk due to its policy
of investing in accordance with an investment strategy. Although the trust's
investment strategy is designed to achieve the trust's investment objective,
the strategy may not prove to be successful. The investment decisions may not
produce the intended results and there is no guarantee that the investment
objective will be achieved.
Legislation Risk. Tax legislation proposed by the President or Congress,
tax regulations proposed by the U.S. Treasury or positions taken by the
Internal Revenue Service ("IRS") could affect the value of the trust by
changing the taxation or tax characterizations of the portfolio securities or
of dividends and other income paid by or related to such securities. Congress
has considered such proposals in the past and may do so in the future. Various
legislative initiatives will be proposed from time to time in the United States
and abroad that may have a negative impact on certain of the companies
represented in the Index. In addition, litigation regarding any of the issuers
of the securities or of the industries represented by these issuers may
negatively impact the share prices of these securities. No one can predict
whether any legislation will be proposed, adopted or amended by Congress and no
one can predict the impact that any other legislation might have on the trust
or the securities included in the Index.
Tax Risk. The trust intends to treat any income it may derive from the FLEX
Options as "qualifying income" under the provisions of the Internal Revenue Code
of 1986, as amended (the "Code"), applicable to "regulated investment companies"
("RICs"), based on language in the Code. In addition, based upon language in the
legislative history of the relevant Code sections, the trust intends to treat
the issuer of the FLEX Options as the ETF, which, assuming the ETF qualifies as
a RIC, would allow the trust to qualify for special rules in the RIC
diversification requirements. If the income is not qualifying income or the
issuer of the FLEX Options is not appropriately the ETF, the trust could lose
its own status as a RIC. The ETF may be classified as a RIC for federal income
tax purposes but may have significant exposure to commodities and other
derivative products. RICs are required to meet certain income and
diversifications tests in order to avoid federal income tax at the RIC level.
Most commodity income will not be qualifying income for a RIC for such purposes.
Derivative income may or may not be qualifying income depending upon whether the
income relates to the RIC's business of investing in securities. The trust has
not reviewed the assets or income of the underlying RICs. If a RIC in the
trust's portfolio does not meet the RIC qualification tests, the RIC would be
taxed as a C corporation and returns from that entity would be on an after-tax
basis. If the ETF is not classified as a RIC, the manner in which the FLEX
Options are treated for the purposes of the trust's diversification tests may
change and, in certain circumstances, the trust could lose its own RIC status.
The trust is investing in offsetting positions in regard to the ETF. The result
of the offsetting positions is that the trust may recognize little or no
long-term capital gain income even if the trust holds its positions for more
than the long-term capital gain holding period. Because of the loss of long-term
capital gains from portfolio investments, in some factual circumstances
investors could have a lower after-tax return from investing in the trust than
from investing directly in the ETF. The trust may have significant exposure to
the FLEX Options on the ETF.
Although the FLEX Options are documented as options, there other
derivative contracts that may be economically identical or substantially
similar that have significantly different tax treatment. For example, if the
FLEX Options were collapsed into a single contract the FLEX Options may be
treated as a notional principal contract under the proposed regulations. The
proposed regulations would require the trust to recognize income periodically
over the term of the contracts if the contracts were notional principal
contracts. Also, option premiums are not taken into income under current law
until the option lapses or is exercised. If the FLEX Options were
recharacterized, there may be a requirement to recognize the option premiums
immediately upon receipt. Since the trust is not planning on including income
from the contract periodically over the life of the contract or including the
option premiums in income, a recharacterization could affect the ability of the
trust to meet certain RIC qualification tests.
If the trust did not qualify as a RIC for any taxable year and certain
relief provisions were not available, the trust's taxable income would be
subject to tax at the trust level and to a further tax at the shareholder level
when such income is distributed. In such event, in order to re-qualify for
taxation as a RIC, the trust might be required to recognize unrealized gains,
pay substantial taxes and interest and make certain distributions. This would
cause investors to incur higher tax liabilities than they otherwise would have
incurred, which would have a negative impact on trust returns. In such event,
it may be determined to reorganize or close the trust or materially change the
trust's investment objective and strategies.
The options included in the trust are exchange-traded options. Under
Section 1256 of the Code, certain types of options are required to be treated as
if they were sold at the end of each year. Such treatment would cause the trust
to have taxable income without receiving cash. In order to maintain its RIC
qualification, the trust must distribute at least 90% of its income annually.
Although the trust does not believe the options are subject to the 1256 rules,
if it were later determined that the options were subject to the 1256 rules the
trust may retroactively lose its RIC qualification and be taxed as a C
corporation. In the event that the trust fails to qualify as a RIC, the trust
will promptly notify unit holders of the implications of that failure.
In the "Taxes" section of this prospectus the potential for capital gains
treatment is described. The Code limits the availability of capital gains
treatment in certain circumstances. If a unit holder holds units as inventory,
the unit holder will not be eligible for capital gains on disposition of the
units. If the transaction is marketed or sold as producing capital gains from a
straddle position or the transaction is identified as a conversion transaction
by the IRS, the unit holder will not be eligible for capital gains. The sponsor
has represented that the transaction will not be marketed or sold as producing
capital gains from a straddle position. The structure of the trust's
investments has not been identified by the IRS as a conversion transaction.
However, the behavior of brokers and dealers distributing the product could
affect the character of the gain on disposition. The IRS could at some future
point identify the structure of the trust's investments as a conversion
transaction. In such a situation, unit holders would not be eligible for
capital gains.
Treasury Obligations Risk. The Treasury Obligations are direct obligations
of the United States that are backed by the full faith and credit of the United
States. The value of the Treasury Obligations will be adversely affected by
decreases in bond prices and increases in interest rates. Certain of the
Treasury Obligations may have been purchased on the trust's inception date at
prices greater than their par value at maturity, indicating a market premium.
Generally, the value of bonds purchased at a market discount will increase in
value faster than bonds purchased at a market premium if interest rates
decrease. Conversely, if interest rates increase, the value of bonds purchased
at a market discount will decrease faster than bonds purchased at a market
premium.
Distributions of interest from the Treasury Obligations may be
insufficient to meet any or all expenses of the trust. If the cash balances in
the income and capital accounts are insufficient to provide for expenses and
other amounts payable by the trust, the trust may sell trust investments to
make such payments. These sales may result in losses to unitholders and the
inability of the trust to meet its investment objective.
Dilution Risk. You could experience a dilution of your investment if we
increase the size of the trust as we sell units. There is no assurance that
your investment will maintain its proportionate share in the trust's profits
and losses, or that your investment will be in the same portfolio for the
duration of the trust.
Implied Volatility Risk. The value of the FLEX Options may change with the
implied volatility of the ETF, the Index and the securities comprising the
Index. No one can predict whether implied volatility will rise or fall in the
future.
Liquidity Risk. The value of a FLEX Option will fall in value if trading in
the FLEX Option is limited or absent. No one can guarantee that a liquid
secondary trading market will exist for the FLEX Options. Trading in the FLEX
Options may be less deep and liquid than in certain other securities. The FLEX
Options may be less liquid than certain non-customized options. [The sponsor
expects that the trust will hold 10% or less of its net asset value in illiquid
securities.] In a less liquid market for the FLEX Options, liquidating the FLEX
Options may require the payment of a premium or acceptance of a discounted price
and may take longer to complete. In a less liquid market for the FLEX Options,
the liquidation of a large number of options may more significantly impact the
price. A less liquid trading market may adversely impact the value of the FLEX
Options and your units. It is not anticipated that there will be an existing
market for options with the exact customized terms as the FLEX Options, and an
active market may not be established. Prior to the trust's inception date, there
has been no existing trading market for the FLEX Options.
Valuation Risk. Under certain circumstances, current market prices may not
be available with respect to the FLEX Options. Under those circumstances, the
value of the FLEX Options will require more reliance on the judgment of the
evaluator than that required for securities for which there is an active
trading market. This creates a risk of mispricing or improper valuation of the
FLEX Options, which could impact the valuation of units.
Inflation Risk. Inflation risk is the risk that the value of assets or
income from investments will be less in the future as inflation decreases the
value of money.
Significant unitholders risk. There may be unitholders of the trust who
hold a significant portion of the trust and, as result, a redemption by such
significant holder may have a material impact on the size, expenses and
viability of the trust.
See "Risk Factors" in Part B of the prospectus for additional
information.
How the Trust Works
Your Trust. Your trust is a unit investment trust registered under the
Investment Company Act of 1940 and the Securities Act of 1933. We created your
trust under a trust agreement between Guggenheim Funds Distributors, LLC (as
sponsor, evaluator and supervisor) and The Bank of New York Mellon (as
trustee). To create your trust, we deposited contracts to purchase securities
with the trustee along with an irrevocable letter of credit or other
consideration to pay for the securities. In exchange, the trustee delivered
units of your trust to us. Each unit represents an undivided interest in the
assets of your trust. These units remain outstanding until redeemed or until
your trust terminates.
Changing Your Portfolio. Your trust is not a managed fund. Unlike a
managed fund, we designed your portfolio to remain relatively fixed after its
inception. Your trust will generally buy and sell securities:
o to pay expenses,
o to issue additional units or redeem units,
o in limited circumstances to protect the trust,
o to avoid direct or indirect ownership of a passive foreign investment
company,
o to make required distributions or avoid imposition of taxes on the
trust
o to maintain the qualification of the trust as a regulated investment
company, or
o as permitted by the trust agreement.
You will not be able to dispose of or vote any of the securities in your
trust.
We will increase the size of your trust as we sell units. When we create
additional units, we will seek to replicate the existing portfolio. In certain
cases, the trustee may need additional time to acquire the securities necessary
to create units and consequently, the trust may not be fully invested at all
times, which may impact the trust's performance. When your trust buys
securities, it will pay brokerage or other acquisition fees. You could
experience a dilution of your investment because of these fees and fluctuations
in security prices between the time we create units and the time your trust
buys the securities. When your trust buys or sells securities, we, acting in an
agency capacity, may direct that the trust places orders with and pays
brokerage commissions to brokers that sell units or are affiliated with your
trust. We will not select firms to handle these transactions on the basis of
their sale of units of your trust or any other products sponsored by us. We
cannot guarantee that your trust will keep its present size and composition for
any length of time.
Termination of Your Trust. Your trust will terminate no later than the
termination date listed in the "Investment Summary" section of this prospectus.
The trustee may terminate your trust early if the value of the trust is less
than $1 million or less than 40% of the value of the securities in the trust at
the end of the initial offering period. At this size, the expenses of your
trust may create an undue burden on your investment. Investors owning
two-thirds of the units in your trust may also vote to terminate the trust
early. We may also terminate your trust in other limited circumstances.
The trustee will notify you of any termination and sell any remaining
securities. The trustee will send your final distribution to you within a
reasonable time following liquidation of all the securities after deducting
final expenses. Your termination distribution may be less than the price you
originally paid for your units.
See "Administration of the Trust" in Part B of the prospectus for
additional information.
General Information
Guggenheim Funds. Guggenheim Funds Distributors, LLC specializes in the
creation, development and distribution of investment solutions for advisors and
their valued clients. In November 2001, we changed our name from Ranson &
Associates, Inc. to Claymore Securities, Inc. ("Claymore"). On September 27,
2010, Claymore officially changed its name to Guggenheim Funds Distributors,
LLC. This change follows the acquisition of Claymore by Guggenheim Partners,
LLC on October 14, 2009. Since the finalization of the acquisition, we have
been operating as a subsidiary of Guggenheim Partners, LLC.
During our history we have been active in public and corporate finance,
have underwritten closed-end funds and have distributed bonds, mutual funds,
closed-end funds, exchange-traded funds, structured products and unit trusts in
the primary and secondary markets. We are a registered broker-dealer and member
of the Financial Industry Regulatory Authority (FINRA). If we fail to or cannot
perform our duties as sponsor or become bankrupt, the trustee may replace us,
continue to operate your trust without a sponsor, or terminate your trust. You
can contact us at our headquarters at 2455 Corporate West Drive, Lisle,
Illinois 60532 or by using the contacts listed on the back cover of this
prospectus. Guggenheim Funds personnel may from time to time maintain a
position in certain securities held by your trust.
Guggenheim Funds and your trust have adopted a code of ethics requiring
Guggenheim Funds' employees who have access to information on trust
transactions to report personal securities transactions. The purpose of the
code is to avoid potential conflicts of interest and to prevent fraud,
deception or misconduct with respect to your trust.
See "Administration of the Trust" in Part B of the prospectus for
additional information.
The Trustee. The Bank of New York Mellon is the trustee of your trust. It
is a trust company organized under New York law. You can contact the trustee by
calling the telephone number on the back cover of this prospectus or write to
Unit Investment Trust Division, 2 Hanson Place, 12th Fl., Brooklyn, New York
11217. We may remove and replace the trustee in some cases without your
consent. The trustee may also resign by notifying the sponsor and investors.
Expenses
Your trust will pay various expenses to conduct its operations. The
"Investment Summary" section of this prospectus shows the estimated amount of
these expenses.
Your trust will pay a fee to the trustee for its services. The trustee also
benefits when it holds cash for the trust in non-interest bearing accounts. Your
trust will reimburse the sponsor as supervisor and evaluator for providing
portfolio supervisory services, evaluating your portfolio and performing
bookkeeping and administrative services. Our reimbursements may exceed the costs
of the services we provide to your trust but will not exceed the costs of
services provided to all Guggenheim Funds unit investment trusts in any calendar
year. In addition, the trustee may reimburse the sponsor out of its own assets
for services performed by employees of the sponsor in connection with the
operation of your trust. All of these fees may adjust for inflation without your
approval.
Your trust will pay a fee to the sponsor for creating and developing the
trust, including determining the trust's objective, policies, composition and
size, selecting service providers and information services, and for providing
other similar administrative and ministerial functions. Your trust pays this
"creation and development fee" of $0.05 per unit from the assets of the trust
as of the close of the initial public offering period. The sponsor does not use
the fee to pay distribution expenses or as compensation for sales efforts.
Your trust will also pay its general operating expenses, including any
licensing fees. Your trust may also pay expenses such as trustee expenses
(including legal and auditing expenses), organization expenses, various
governmental charges, fees for extraordinary trustee services, costs of taking
action to protect your trust, costs of indemnifying the trustee and Guggenheim
Funds, legal fees and expenses, expenses incurred in contacting you and costs
incurred to reimburse the trustee for advancing funds to meet distributions.
Your trust may pay the costs of updating its registration statement each year.
The trustee may sell securities to pay trust expenses.
See "Expenses of the Trust" in Part B of the prospectus for additional
information.
Report of Independent Registered Public Accounting Firm
Unitholders
Guggenheim Defined Portfolios, Series 1561
We have audited the accompanying statement of financial condition,
including the trust portfolio set forth on page 15 and 16 of this prospectus,
of Guggenheim Defined Portfolios, Series 1561, as of _____, 2017, the initial
date of deposit. This statement of financial condition is the responsibility of
the trust's sponsor. Our responsibility is to express an opinion on this
statement of financial condition based on our audit.
We conducted our audit in accordance with the auditing standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the statement of financial condition is free of material misstatement.
We were not engaged to perform an audit of the trust's internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the trust's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the statement of financial condition, assessing the accounting principles used
and significant estimates made by the sponsor, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
with The Bank of New York Mellon, trustee, of cash or an irrevocable letter of
credit deposited for the purchase of securities as shown in the statement of
financial condition as of _____, 2017. We believe that our audit of the
statement of financial condition provides a reasonable basis for our opinion.
In our opinion, the statement of financial condition referred to above
presents fairly, in all material respects, the financial position of Guggenheim
Defined Portfolios, Series 1561, as of _____, 2017, in conformity with
accounting principles generally accepted in the United States of America.
Grant Thornton LLP
Chicago, Illinois
_______, 2017
Guggenheim Defined Portfolios, Series 1561
Statement of Financial Condition
as of the Inception Date, _______, 2017
Investment in securities
Sponsor's contracts to purchase underlying securities backed by
letter of credit (1)(2) $
------------
$
------------
Liabilities and interest of unitholders
Liabilities:
Organization costs (3) $
Creation and development fee (6)
Deferred sales fee (4)
============
Interest of unitholders:
Cost to unitholders (5)
Less: initial sales fee (4)
Less: organization costs, C&D and deferred sales fees (3)(4)(5)(6)
Net interest of unitholders
------------
Total $
============
Number of units
============
Net Asset Value per Unit $
============
-----------------------
(1) Aggregate cost of the securities is based on the closing sale price
evaluations as determined by the trustee.
(2) A letter of credit has been deposited with The Bank of New York Mellon,
trustee, covering the funds (aggregating $________) necessary for the
purchase of the securities in the trust, represented by purchase contracts.
(3) A portion of the Public Offering Price represents an amount sufficient to
pay for all or a portion of the costs incurred in establishing the trust.
These costs have been estimated at $____ per 100 units of the trust. A
distribution will be made as of the close of the initial offering period or
six months after the initial date of deposit (at the discretion of the
sponsor) to an account maintained by the trustee from which this obligation
of the investors will be satisfied. Organization costs will not be assessed
to units that are redeemed prior to the close of the initial offering
period or six months after the initial date of deposit (at the discretion
of the sponsor). To the extent that actual organization costs are greater
than the estimated amount, only the estimated organization costs added to
the Public Offering Price will be deducted from the assets of the trust.
(4) The aggregate cost to unitholders includes a maximum sales fee, which
consists of an initial sales fee, a deferred sales fee and a creation and
development fee. The initial sales fee is equal to the difference between
the maximum sales fee and the sum of the remaining deferred sales fee and
the creation and development fee. On the Inception Date, the maximum sales
fee is ____% of the Public Offering Price (equivalent to ____% of the net
amount invested). The deferred sales fee is equal to $____ per unit.
(5) The aggregate cost to investors includes the applicable sales fee, assuming
no reduction of sales fees.
(6) The trust is committed to pay a creation and development fee of $5.00 per
100 units at the close of the initial public offering period. The creation
and development fee will not be assessed to units that are redeemed prior
to the close of the initial offering period.
APPENDIX
Hypothetical Option Expiration Examples
The following tables illustrate the payments on the FLEX Options (or
"Options") and examples of hypothetical trust returns and losses for units held
from the trust's inception date to the Mandatory Termination Date for
transactional and fee-based accounts. The amounts shown for the "Hypothetical
Amount per Unit at trust Termination" reflect amounts to be distributed at the
Mandatory Termination Date from the FLEX Options and maturing principal from
the Treasury Obligations (which amounts do not represent a payment of interest
from the Treasury Obligations, but a principal payment). These amounts do not
reflect the interest income, if any, from the Treasury Obligations which is
intended to be distributed to the trust on the Mandatory Termination Date, nor
the cash deposited in the trust which is equal to the estimated fees and
organization costs of the trust.
The examples are based on various hypothetical levels of "ETF Returns"
(Closing Value/Initial Value - 100%) over the life of the trust. ETF Returns
represent the percentage increase or decrease of the price of the ETF from the
time of the trust's inception date when the Option strike prices are set to the
close of the market on the Option Expiration Date.
Negative values under "Hypothetical Return for Trust" indicate a loss on
the units. The table below is a hypothetical illustration of the mathematical
principles underlying the trust's investment strategy. Estimated sales charges
and organization costs are intended to be paid from an amount of cash to be
deposited at the trust's inception. Trust operating expenses are intended to be
paid from interest income received from the Treasury Obligations. The
illustration does not predict or project the performance of units, the trust or
the trust's investment strategy. For an explanation of the Option computations,
please refer to the discussion under "Principal Investment Strategy."
The amount shown in the tables below under "Principal from Treasury
Obligations per Unit" is the principal amount of the Treasury Obligations per
unit, which will be received by the trust and paid to investors at various
points during the life of the trust. The amount shown under "Hypothetical
Amount per Unit" is the sum of the "Payment on Written Call Option at
Expiration per Unit," "Payment on Purchased Call Options at Expiration per
Unit" and "Principal from Treasury Obligations per Unit." The amount shown
under "Hypothetical Total Return" is the "Hypothetical Amount per Unit" divided
by the public offering price at inception. The Hypothetical Total Return
reflects the payment of the sales charge, unitholder discounts, if any, and the
creation and development fee, as set forth below. Amounts are rounded for ease
of understanding. The actual amounts that you receive or actual losses that you
experience may vary from these estimates with changes in expenses or a change
in the proportional relationship of the Options and Treasury Obligations based
on the number of Option contracts and Treasury Obligations.
Transactional Accounts:
Net Payments Principal Hypothetical Total
on Options from Treasury Hypothetical Return (Negative
Hypothetical at Expiration Obligations Amount Amounts Indicate
ETF Return per Unit per Unit per Unit Losses)
50% + =
40% + =
30% + =
20% + =
10% + =
0% + =
-10% + =
-20% + =
-30% + =
-40% + =
-50% + =
-60% + =
-70% + =
-80% + =
-90% + =
-100% + =
Fee-Based Accounts:
Net Payments Principal Hypothetical Total
on Options from Treasury Hypothetical Return (Negative
Hypothetical at Expiration Obligations Amount Amounts Indicate
ETF Return per Unit per Unit per Unit Losses)
50% + =
40% + =
30% + =
20% + =
10% + =
0% + =
-10% + =
-20% + =
-30% + =
-40% + =
-50% + =
-60% + =
-70% + =
-80% + =
-90% + =
-100% + =
The tables above are provided for
illustrative purposes only and are
hypothetical.
Only the Hypothetical Amount per Unit levels over the public offering
price represent a positive return on your investment for units purchased at the
initial offering price per unit. Amounts below the public offering price for
units purchased at the public offering price per unit represent a loss on your
investment. The tables above do not purport to be representative of every
possible scenario concerning increases or decreases in the price of shares of
the ETF. No one can predict the ETF closing price. The assumptions made in
connection with the examples may not reflect actual events. You should not take
these examples as an indication or assurance of the expected performance of the
ETF or the return on units. If the trust is unable to maintain the proportional
relationship between the FLEX Options and Treasury Obligations in the trust
based on the number of FLEX Option contracts and Treasury Obligations, it will
not be able to generate the "Hypothetical Total Return for Trust" levels shown
above or achieve its objective. A failure to maintain the proportional
relationship between the FLEX Options based on the number of FLEX Option
contracts in the trust may result in lower or higher returns or losses than the
Hypothetical Total Return for trust and may increase the level of risk of an
investment in units. Investors may lose some or all of their investment.
These examples do not attempt to present all possible payments, returns or
losses at expiration of the FLEX Options or termination of the trust and do not
present any projection of actual trust performance. These examples are merely
intended to illustrate the operation of the FLEX Options at the scheduled
expiration and the return on the FLEX Options and maturity proceeds from
Treasury Obligations per unit that the trust would receive or pay in certain
situations at the scheduled expiration of the FLEX Options and maturity dates of
the Treasury Obligations. These examples also illustrate how the returns on the
trust from the FLEX Options, Treasury Obligations and cash equivalents vary
depending on the performance of the ETF.
Transactional Accounts
For example, if the Hypothetical ETF Return were [__]%, then:
o At the Mandatory Termination Date, the trust would receive a net
payment on the FLEX Options and Treasury Obligations of approximately
$[__] per unit consisting of:
o no payment being made with respect to the Written Put Options or
Written Call Options, as they would expire worthless;
o the trust receiving a payment of $[__] on the Purchased Call
Option; and
o principal from the maturing Treasury Obligations of $[__ per
unit]; therefore,
o the hypothetical termination date return for the trust would be
[__]%.
o Approximately $[__] cash per unit would remain after paying sales
charges and organization costs.
o Interest income (less trust expenses), if any, would be distributed on
the Mandatory Termination Date from the Treasury Obligations.
If the Hypothetical ETF Return were [__]%, then over the life of the
trust:
o At Mandatory Termination Date, the trust would receive a net payment
on the FLEX Options and Treasury Obligations of approximately $[__]
per unit consisting of:
o the trust making a payment of $[__] on the Written Put Option;
o no payment being made with respect to the Purchased Call Options
or Written Call Options as they would expire worthless; and
o principal from the maturing Treasury Obligations of $[__ per
unit]; therefore,
o the hypothetical termination date return for the trust would be
[__]%.
o Approximately $[__] cash per unit would remain after paying sales
charges and organization costs.
o Interest income (less trust expenses), if any, would be distributed on
the Mandatory Termination Date from the Treasury Obligations.
If the Hypothetical ETF Return were [__]%, then over the life of the trust:
o At the Mandatory Termination Date, the trust would receive a net
payment on the FLEX Options and Treasury Obligations of approximately
$[__] per unit consisting of:
o the trust making a payment of $[__] on the Written Call Option;
o the trust receiving a payment of $[__] on the Purchased Call
Option; and
o No payment being made with respect to the Written Put Options as they
would expire worthless; and
o principal from the maturing Treasury Obligations of $[__ per
unit]; therefore,
o the hypothetical termination date return for the trust would be
[__]%.
o Approximately $[__] cash per unit would remain after paying sales
charges and organization costs.
o Interest income (less trust expenses), if any, would be distributed on
the Mandatory Termination Date from the Treasury Obligations.
Fee-Based Accounts
For example, if the Hypothetical ETF Return were [__]%, then:
o At the Mandatory Termination Date, the trust would receive a net
payment on the FLEX Options and Treasury Obligations of approximately
$[__] per unit consisting of:
o no payment being made with respect to the Written Put Options or
Written Call Options, as they would expire worthless;
o the trust receiving a payment of $[__] on the Purchased Call
Option; and
o principal from the maturing Treasury Obligations of $[__ per
unit]; therefore,
o the hypothetical termination date return for the trust would be
[__]%.
o Approximately $[__] cash per unit would remain after paying sales
charges and organization costs.
o Interest income (less trust expenses), if any, would be distributed on
the Mandatory Termination Date from the Treasury Obligations.
If the Hypothetical ETF Return were [__]%, then over the life of the trust:
o At Mandatory Termination Date, the trust would receive a net payment
on the FLEX Options and Treasury Obligations of approximately $[__]
per unit consisting of:
o the trust making a payment of $[__] on the Written Put Option;
o no payment being made with respect to the Purchased Call Options
or Written Call Options as they would expire worthless; and
o principal from the maturing Treasury Obligations of $[__ per
unit]; therefore,
o the hypothetical termination date return for the trust would be
[__]%.
o Approximately $[__] cash per unit would remain after paying sales
charges and organization costs.
o Interest income (less trust expenses), if any, would be distributed on
the Mandatory Termination Date from the Treasury Obligations.
If the Hypothetical ETF Return were [__]%, then over the life of the trust:
o At the Mandatory Termination Date, the trust would receive a net
payment on the FLEX Options and Treasury Obligations of approximately
$[__] per unit consisting of:
o the trust making a payment of $[__] on the Written Call Option;
o the trust receiving a payment of $[__] on the Purchased Call
Option; and
o No payment being made with respect to the Written Put Options as they
would expire worthless; and
o principal from the maturing Treasury Obligations of $[__ per
unit]; therefore,
o the hypothetical termination date return for the trust would be
[__]%.
o Approximately $[__] cash per unit would remain after paying sales
charges and organization costs.
o Interest income (less trust expenses), if any, would be distributed on
the Mandatory Termination Date from the Treasury Obligations.
These examples assume that the units were purchased at the trust's
inception and held until the Termination Date and that the FLEX Options are
held by the trust to the Option Expiration Date on [______, 2019].
These examples do not show the past performance of the ETF or any
investment. These examples are for illustrative purposes only and are not
intended to be indicative of future results of the ETF, the FLEX Options or the
trust's units. The examples only illustrate payments related to the FLEX
Options at the scheduled FLEX Option expiration and hypothetical performance of
the trust's assets. You may realize a return or loss that is higher or lower
than the intended returns or losses as a result of redeeming units prior to the
Mandatory Termination Date, where FLEX Options or Treasury Obligations are
otherwise liquidated by the trust prior to expiration, if the trust is unable
to maintain the proportional relationship of the FLEX Options or Treasury
Obligations based on the number of FLEX Option contracts and Treasury
Obligations in the trust's portfolio, if a Corporate Action occurs with respect
to the ETF, or if there are increases in potential tax-related expenses and
other expenses of the trust above estimated levels.
ETF Past Performance
The sponsor has obtained the historical trading price information about
the ETF in the chart and the graph below from publicly available sources. The
sponsor has not independently verified the accuracy or completeness of the
information obtained from publicly available sources.
The historical prices of the ETF should not be taken as an indication of
future performance, and no assurance can be given as to the Closing Value. The
sponsor cannot assure you that the performance of the ETF will result in the
return of any of your investment.
The following table sets forth the high and low closing prices of the ETF,
as well as end-of-quarter closing prices, during the periods indicated below.
[Insert ETF Historical Performance Table]
PAST PERFORMANCE IS NOT
INDICATIVE OF FUTURE RESULTS.
The following graph sets forth the historical performance of the ETF based
on the daily closing prices from [_________] through [_________]. The closing
price of the ETF on [________] was $[____].
[Insert ETF Historical Performance Chart]
Past performance is not indicative of future results.
GUGGENHEIM DEFINED PORTFOLIOS
GUGGENHEIM PORTFOLIO PROSPECTUS
PART B DATED _______, 2017
The prospectus for a Guggenheim Defined Portfolio (a "trust") is divided
into two parts. Part A of the prospectus relates exclusively to a particular
trust or trusts and provides specific information regarding each trust's
portfolio, strategies, investment objectives, expenses, financial highlights,
income and capital distributions, hypothetical performance information, risk
factors and optional features. Part B of the prospectus provides more general
information regarding the Guggenheim Defined Portfolios. You should read both
parts of the prospectus and retain them for future reference. Except as
provided in Part A of the prospectus, the information contained in this Part B
will apply to each trust.
Contents
General Information 2
Investment Policies 2
Risk Factors 3
Administration of the Trust 6
Expenses of the Trust 12
Portfolio Transactions and Brokerage Allocation 14
Purchase, Redemption and Pricing of Units 14
Taxes 19
Experts 22
General Information
Each trust is one of a series of separate unit investment trusts created
under the name Guggenheim Defined Portfolios and registered under the
Investment Company Act of 1940 and the Securities Act of 1933. Each trust was
created as a common law trust on the inception date described in the prospectus
under the laws of the state of New York. Each trust was created under a trust
agreement among Guggenheim Funds Distributors, LLC (as sponsor, evaluator and
supervisor) and The Bank of New York Mellon (as trustee).
When your trust was created, the sponsor delivered to the trustee
securities or contracts for the purchase thereof for deposit in the trust and
the trustee delivered to the sponsor documentation evidencing the ownership of
units of the trust. After your trust is created, the sponsor may deposit
additional securities in the trust, contracts to purchase additional securities
along with cash (or a bank letter of credit in lieu of cash) to pay for such
contracted securities or cash (including a letter of credit) with instructions
to purchase additional securities. Such additional deposits will be in amounts
which will seek to replicate, as closely as practicable, the portfolio
immediately prior to such deposits. If the sponsor deposits cash, existing and
new investors may experience a dilution of their investments and a reduction in
their anticipated income because of fluctuations in the prices of the
securities between the time of the cash deposit and the purchase of the
securities and because the trust will pay the associated brokerage fees.
A trust consists of (i) the securities listed under "Trust Portfolio" in
the prospectus as may continue to be held from time to time in the trust; (ii)
any additional securities acquired and held by the trust pursuant to the
provisions of the trust agreement; and (iii) any cash held in the accounts of
the trust. Neither the sponsor nor the trustee shall be liable in any way for
any failure in any of the securities. However, should any contract for the
purchase of any of the securities initially deposited in a trust fail, the
sponsor will, unless substantially all of the moneys held in the trust to cover
such purchase are reinvested in substitute securities in accordance with the
trust agreement, refund the cash and sales charge attributable to such failed
contract to all unitholders on the next distribution date.
Investment Policies
The trust is a unit investment trust and is not an "actively managed"
fund. Traditional methods of investment management for a managed fund typically
involve frequent changes in a portfolio of securities on the basis of economic,
financial and market analysis. The portfolio of a trust, however, will not be
actively managed and therefore the adverse financial condition of an issuer
will not necessarily require the sale of its securities from a portfolio.
Unitholders will not be able to dispose of or vote any of the securities
in a trust. As the holder of the securities, the trustee will vote the
securities and will endeavor to vote the securities such that the securities
are voted as closely as possible in the same manner and the same general
proportion as are the securities held by owners other than such trust. However,
the trustee may not be able to vote the securities in a trust that are traded
on foreign exchanges.
The trust agreement provides that the sponsor may (but need not) direct
the trustee to dispose of a security in certain events such as the issuer
having defaulted on the payment on any of its outstanding obligations, the
issuer having qualified as a passive foreign investment company under the
Internal Revenue Code or the price of a security has declined to such an extent
or other such credit factors exist so that in the opinion of the sponsor the
retention of such securities would be detrimental to the trust. If a public
tender offer has been made for a security or a merger or acquisition has been
announced affecting a security, the trustee may either sell the security or
accept a tender offer for cash if the supervisor determines that the sale or
tender is in the best interest of unitholders. The trustee will distribute any
cash proceeds to unitholders. Pursuant to the trust agreement and with limited
exceptions, the trustee may sell any securities or other properties acquired in
exchange for securities such as those acquired in connection with a merger or
other transaction. If offered such new or exchanged securities or property
other than cash, the trustee shall reject the offer. However, in the event such
securities or property are nonetheless acquired by the trust, they may be
accepted for deposit in a trust and either sold by the trustee or held in a
trust pursuant to the direction of the sponsor. Proceeds from the sale of
securities (or any securities or other property received by the trust in
exchange for securities) are credited to the Capital Account for distribution
to unitholders or to meet redemptions.
Except as stated in the trust agreement, or in the prospectus, the
acquisition by the trust of any securities other than the portfolio securities
is prohibited. The trustee may sell securities, designated by the sponsor, from
the trust for the purpose of redeeming units of a trust tendered for redemption
and the payment of expenses and for such other purposes as permitted under the
trust agreement.
Notwithstanding the foregoing, the trustee is authorized to reinvest any
funds held in the Capital or Income Accounts, pending distribution, in U.S.
Treasury obligations which mature on or before the next applicable distribution
date. Any obligations so acquired must be held until they mature and proceeds
therefrom may not be reinvested.
Proceeds from the sale of securities (or any securities or other property
received by a trust in exchange for securities) are credited to the Capital
Account of a trust for distribution to unitholders or to meet redemptions.
Except for failed securities and as provided in the prospectus or in the trust
agreement, the acquisition by a trust of any securities other than the
portfolio securities is prohibited. The trustee may sell securities from a
trust for limited purposes, including redeeming units tendered for redemption
and the payment of expenses.
Risk Factors
Stocks. An investment in units of a trust should be made with an
understanding of the risks inherent in an investment in equity securities,
including the risk that the financial condition of issuers of the securities
may become impaired or that the general condition of the stock market may
worsen (both of which may contribute directly to a decrease in the value of the
securities and thus, in the value of the units) or the risk that holders of
common stock have a right to receive payments from the issuers of those stocks
that is generally inferior to that of creditors of, or holders of debt
obligations issued by, the issuers and that the rights of holders of common
stock generally rank inferior to the rights of holders of preferred stock. You
could lose some or all of your investment in the trust. Common stocks are
especially susceptible to general stock market movements and to volatile
increases and decreases in value as market confidence in and perceptions of the
issuers change. These perceptions are based on unpredictable factors including
expectations regarding government, economic, monetary and fiscal policies,
inflation and interest rates, economic expansion or contraction, and global or
regional political, economic or banking crises.
Holders of common stock incur more risk than the holders of preferred
stocks and debt obligations because common stockholders, as owners of the
entity, have generally inferior rights to receive payments from the issuer in
comparison with the rights of creditors of, or holders of debt obligations or
preferred stock issued by the issuer. Holders of common stock of the type held
by a trust have a right to receive dividends only when and if, and in the
amounts, declared by the issuer's board of directors and to participate in
amounts available for distribution by the issuer only after all other claims on
the issuer have been paid or provided for. By contrast, holders of preferred
stock have the right to receive dividends at a fixed rate when and as declared
by the issuer's board of directors, normally on a cumulative basis, but do not
participate in other amounts available for distribution by the issuing
corporation. Cumulative preferred stock dividends must be paid before common
stock dividends and any cumulative preferred stock dividend omitted is added to
future dividends payable to the holders of cumulative preferred stock.
Preferred stocks are also entitled to rights on liquidation which are senior to
those of common stocks. Moreover, common stocks do not represent an obligation
of the issuer and therefore do not offer any assurance of income or provide the
degree of protection of capital debt securities. Indeed, the issuance of debt
securities or even preferred stock will create prior claims for payment of
principal, interest, liquidation preferences and dividends which could
adversely affect the ability and inclination of the issuer to declare or pay
dividends on its common stock or the rights of holders of common stock with
respect to assets of the issuer upon liquidation or bankruptcy. Further, unlike
debt securities which typically have a stated principal amount payable at
maturity (whose value, however, will be subject to market fluctuations prior
thereto), common stocks have neither a fixed principal amount nor a maturity
and have values which are subject to market fluctuations for as long as the
stocks remain outstanding. The value of the securities in a portfolio thus may
be expected to fluctuate over the entire life of a trust to values higher or
lower than those prevailing at the time of purchase.
The sponsor's buying and selling of the securities, especially during the
initial offering of units of the trust or to satisfy redemptions of units may
impact upon the value of the underlying securities and the units. The
publication of the list of the securities selected for the trust may also cause
increased buying activity in certain of the stocks comprising the portfolio.
After such announcement, investment advisory and brokerage clients of the
sponsor and its affiliates may purchase individual securities appearing on the
list during the course of the initial offering period or may purchase warrants
issued by the sponsor or its affiliates which are based on the performance of
the securities on the list. The sponsor or its affiliates may also purchase
securities as a hedge against its risk on the warrants (although generally the
sponsor and its affiliates will not purchase securities for their own account
until after the trust portfolio has been acquired). Such buying activity in the
stock of these companies or issuance of the warrants prior to the purchase of
the securities by the trust may cause the trust to purchase stocks at a higher
price than those buyers who effect purchases by the trust.
Fixed Portfolio. Investors should be aware that the trust is not "managed"
and as a result, the adverse financial condition of a company will not result
in the elimination of its securities from the portfolio of the trust except
under extraordinary circumstances. Investors should note in particular that the
securities were selected on the basis of the criteria set forth in the
prospectus and that the trust may continue to purchase or hold securities
originally selected through this process even though the evaluation of the
attractiveness of the securities may have changed. A number of the securities
in the trust may also be owned by other clients of the sponsor. However,
because these clients may have differing investment objectives, the sponsor may
sell certain securities from those accounts in instances where a sale by the
trust would be impermissible, such as to maximize return by taking advantage of
market fluctuations. In the event a public tender offer is made for a security
or a merger or acquisition is announced affecting a security, the sponsor may
instruct the trustee to tender or sell the security on the open market when, in
its opinion, it is in the best interest of the unitholders of the unit to do
so. Although the portfolio is regularly reviewed and evaluated and the sponsor
may instruct the trustee to sell securities under certain limited
circumstances, securities will not be sold by the trust to take advantage of
market fluctuations or changes in anticipated rates of appreciation. As a
result, the amount realized upon the sale of the securities may not be the
highest price attained by an individual security during the life of the trust.
The prices of single shares of each of the securities in the trust vary widely,
and the effect of a dollar of fluctuation, either higher or lower, in stock
prices will be much greater as a percentage of the lower-price stocks' purchase
price than as a percentage of the higher-price stocks' purchase price.
Exchange-Traded Fund Risks. If set forth in Part A of the prospectus, a
trust may invest in the common stock of exchange-traded funds ("ETFs"). ETFs
are investment pools that hold other securities. ETFs are either open-end
management investment companies or unit investment trusts registered under the
Investment Company Act of 1940. Unlike typical open-end funds or unit
investment trusts, ETFs generally do not sell or redeem their individual shares
at net asset value. In addition, securities exchanges list ETF shares for
trading, which allows investors to purchase and sell individual ETF shares at
current market prices throughout the day. ETFs therefore possess
characteristics of traditional open-end funds and unit investment trusts, which
issue redeemable shares, and of corporate common stocks or closed-end funds,
which generally issue shares that trade at negotiated prices on securities
exchanges and are not redeemable. ETFs are subject to various risks, including
management's ability to meet the fund's investment objective. The underlying
ETF has management and operating expenses. You will bear not only your share of
the trust's expenses, but also the expenses of the underlying ETF. By investing
in an ETF, the trust incurs greater expenses than you would incur if you
invested directly in the ETF.
Shares of ETFs may trade at a discount from their net asset value in the
secondary market. This risk is separate and distinct from the risk that the net
asset value of the ETF shares may decrease. The amount of such discount from
net asset value is subject to change from time to time in response to various
factors.
Market Discounts or Premiums. Certain of the securities may have been
deposited at a market discount or premium principally because their dividend
rates are lower or higher than prevailing rates on comparable securities. The
current returns of market discount securities are lower than comparably rated
securities selling at par because discount securities tend to increase in
market value as they approach maturity. The current returns of market premium
securities are higher than comparably rated securities selling at par because
premium securities tend to decrease in market value as they approach maturity.
Because part of the purchase price is returned through current income payments
and not at maturity, an early redemption at par of a premium security will
result in a reduction in yield to the trust. Market premium or discount
attributable to dividend rate changes does not indicate market confidence or
lack of confidence in the issue.
Liquidity. Whether or not the securities are listed on a national
securities exchange, the principal trading market for the securities may be in
the over-the-counter market. As a result, the existence of a liquid trading
market for the securities may depend on whether dealers will make a market in
the securities. There can be no assurance that a market will be made for any of
the securities, that any market for the securities will be maintained or of the
liquidity of the securities in any markets made. In addition, a trust is
restricted under the Investment Company Act of 1940 from selling securities to
the sponsor. The price at which the securities may be sold to meet redemptions
and the value of a trust will be adversely affected if trading markets for the
securities are limited or absent.
Additional Deposits. The trust agreement authorizes the sponsor to
increase the size of a trust and the number of units thereof by the deposit of
additional securities, or cash (including a letter of credit) with instructions
to purchase additional securities, in such trust and the issuance of a
corresponding number of additional units. If the sponsor deposits cash,
existing and new investors may experience a dilution of their investments and a
reduction in their anticipated income because of fluctuations in the prices of
the securities between the time of the cash deposit and the purchase of the
securities and because a trust will pay the associated brokerage fees. To
minimize this effect, the trusts will attempt to purchase the securities as
close to the evaluation time or as close to the evaluation prices as possible.
Some of the securities may have limited trading volume. The trustee, with
directions from the sponsor, will endeavor to purchase securities with
deposited cash as soon as practicable reserving the right to purchase those
securities over the 20 business days following each deposit in an effort to
reduce the effect of these purchases on the market price of those stocks. This
could, however, result in the trusts' failure to participate in any
appreciation of those stocks before the cash is invested. If any cash remains
at the end of this period (and such date is within the 90-day period following
the inception date) and cannot be invested in one or more stocks, at what the
sponsor considers reasonable prices, it intends to use that cash to purchase
each of the other securities in the original proportionate relationship among
those securities. Similarly, at termination of the trust, the sponsor reserves
the right to sell securities over a period of up to nine business days to
lessen the impact of its sales on the market price of the securities. The
proceeds received by unitholders following termination of the trust will
reflect the actual sales proceeds received on the securities, which will likely
differ from the closing sale price on the termination date.
Litigation and Legislation. At any time litigation may be initiated on a
variety of grounds, or legislation may be enacted with respect to the
securities in a trust or the issuers of the securities. There can be no
assurance that future litigation or legislation will not have a material
adverse effect on the trust or will not impair the ability of issuers to
achieve their business goals.
Administration of the Trust
Distributions to Unitholders. Income received by a trust is credited by
the trustee to the Income Account of the trust. Other receipts are credited to
the Capital Account of a trust. Income received by a trust will be distributed
on or shortly after the distribution dates each year shown in the prospectus on
a pro rata basis to unitholders of record as of the preceding record date shown
in the prospectus. However, if set forth in Part A of the prospectus that the
trust will prorate distributions on an annual basis ("Income Averaging"), then
income received by the trust will be distributed on a prorated basis of
one-twelfth of the estimated annual income to the trust for the ensuing 12
months. All distributions will be net of applicable expenses. There is no
assurance that any actual distributions will be made since all dividends
received may be used to pay expenses. In addition, excess amounts from the
Capital Account of a trust, if any, will be distributed at least annually to
the unitholders then of record. Proceeds received from the disposition of any
of the securities after a record date and prior to the following distribution
date will be held in the Capital Account and not distributed until the next
distribution date applicable to the Capital Account. The trustee shall be
required to make a distribution from the Capital Account if the cash balance on
deposit therein available for distribution shall be sufficient to distribute at
least $1.00 per 100 units. The trustee is not required to pay interest on funds
held in the Capital or Income Accounts (but may itself earn interest thereon
and therefore benefits from the use of such funds). The trustee is authorized
to reinvest any funds held in the Capital or Income Accounts, pending
distribution, in U.S. Treasury obligations which mature on or before the next
applicable distribution date. Any obligations so acquired must be held until
they mature and proceeds therefrom may not be reinvested.
The distribution to the unitholders as of each record date will be made on
the following distribution date or shortly thereafter and shall consist of an
amount substantially equal to such portion of the unitholders' pro rata share
of the dividend distributions then held in the Income Account after deducting
estimated expenses. Because dividends are not received by a trust at a constant
rate throughout the year, such distributions to unitholders are expected to
fluctuate. However, if the trust uses Income Averaging, the trust prorates the
income distribution on an annual basis and annual income distributions are
expected to vary from year to year. If the amount on deposit in the Income
Account is insufficient for payment of the amount of income to be distributed
on a monthly basis, the trustee shall advance out of its own funds and cause to
be deposited in and credited to such Income Account such amount as may be
required to permit payment of the monthly income distribution. The trustee
shall be entitled to be reimbursed by the trust, without interest, out of
income received by the trust subsequent to the date of such advance and subject
to the condition that any such reimbursement shall be made only if it will not
reduce the funds in or available for the Income Account to an amount less than
required for the next ensuing distribution. Persons who purchase units will
commence receiving distributions only after such person becomes a record owner.
A person will become the owner of units, and thereby a unitholder of record, on
the date of settlement provided payment has been received. Notification to the
trustee of the transfer of units is the responsibility of the purchaser, but in
the normal course of business such notice is provided by the selling
broker-dealer.
The trustee will periodically deduct from the Income Account of a trust
and, to the extent funds are not sufficient therein, from the Capital Account
of a trust amounts necessary to pay the expenses of a trust. The trustee also
may withdraw from said accounts such amounts, if any, as it deems necessary to
establish a reserve for any governmental charges payable out of a trust.
Amounts so withdrawn shall not be considered a part of a trust's assets until
such time as the trustee shall return all or any part of such amounts to the
appropriate accounts. In addition, the trustee may withdraw from the Income and
Capital Accounts of a trust such amounts as may be necessary to cover
redemptions of units.
Distribution Reinvestment. Unitholders may elect to have distributions of
capital (including capital gains) or dividends, if any, or both automatically
invested into additional units of their trust without a sales fee.
Your trust will pay any deferred sales fee per unit regardless of any
sales fee discounts. However, if you elect to have distributions on your units
reinvested into additional units of your trust, you will be credited the amount
of any remaining deferred sales charge on such additional units at the time of
reinvestment.
Unitholders who are receiving distributions in cash may elect to
participate in distribution reinvestment by filing with the Program Agent an
election to have such distributions reinvested without charge. Such election
must be received by the Program Agent at least ten days prior to the record
date applicable to any distribution in order to be in effect for such record
date. Any such election shall remain in effect until a subsequent notice is
received by the Program Agent.
The Program Agent is The Bank of New York Mellon. All inquiries concerning
participating in distribution reinvestment should be directed to The Bank of
New York Mellon at its Unit Investment Trust Division office.
Statements to Unitholders. With each distribution, the trustee will
furnish to each registered holder a statement of the amount of income and the
amount of other receipts, if any, which are being distributed, expressed in
each case as a dollar amount per unit.
The accounts of a trust will not be audited annually unless the sponsor
determines that such an audit would be in the best interest of the unitholders
of the trust. If an audit is conducted, it will be done at the related trust's
expense, by independent public accountants designated by the sponsor. The
accountants' report will be furnished by the trustee to any unitholder upon
written request. Within a reasonable period of time after the end of each
calendar year, the trustee shall furnish to each person who at any time during
the calendar year was a unitholder of a trust a statement, covering the
calendar year, generally setting forth for the trust:
(A) As to the Income Account:
(1) Income received;
(2) Deductions for applicable taxes and for fees and expenses of the trust
and for redemptions of units, if any; and
(3) The balance remaining after such distributions and deductions,
expressed in each case both as a total dollar amount and as a dollar
amount representing the pro rata share of each unit outstanding on the
last business day of such calendar year; and
(B) As to the Capital Account:
(1) The dates of disposition of any securities and the net proceeds
received therefrom;
(2) Deductions for payment of applicable taxes and fees and expenses of
the trust; and
(3) The balance remaining after such distributions and deductions
expressed both as a total dollar amount and as a dollar amount
representing the pro rata share of each unit outstanding on the last
business day of such calendar year; and
(C) The following information:
(1) A list of the securities as of the last business day of such calendar
year;
(2) The number of units outstanding on the last business day of such
calendar year;
(3) The redemption price based on the last evaluation made during such
calendar year; and
(4) The amount actually distributed during such calendar year from the
Income and Capital Accounts separately stated, expressed both as total
dollar amounts and as dollar amounts per unit outstanding on the
record dates for each such distribution.
Rights of Unitholders. A unitholder may at any time tender units to the
trustee for redemption. The death or incapacity of any unitholder will not
operate to terminate a trust nor entitle legal representatives or heirs to claim
an accounting or to bring any action or proceeding in any court for partition or
winding up of a trust. No unitholder shall have the right to control the
operation and management of a trust in any manner, except to vote with respect
to the amendment of the trust agreement or termination of a trust.
Amendment and Termination. The trust agreement may be amended by the
trustee and the sponsor without the consent of any of the unitholders: (i) to
cure any ambiguity or to correct or supplement any provision which may be
defective or inconsistent; (ii) to change any provision thereof as may be
required by the Securities and Exchange Commission or any successor governmental
agency; (iii) to make such provisions as shall not materially adversely affect
the interests of the unitholders; or (iv) to make such other amendments as may
be necessary for a trust to qualify as a regulated investment company, in the
case of a trust which has elected to qualify as such. The trust agreement with
respect to any trust may also be amended in any respect by the sponsor and the
trustee, or any of the provisions thereof may be waived, with the consent of the
holders of units representing 66 2/3% of the units then outstanding of the
trust, provided that no such amendment or waiver will reduce the interest of any
unitholder thereof without the consent of such unitholder or reduce the
percentage of units required to consent to any such amendment or waiver without
the consent of all unitholders of the trust. In no event shall the trust
agreement be amended to increase the number of units of a trust issuable
thereunder, to permit the acquisition of any securities in addition to or in
substitution for those initially deposited in the trust or to adversely affect
the characterization of a trust as a regulated investment company for federal
income tax purposes, except in accordance with the provisions of the trust
agreement. The trustee shall promptly notify unitholders of the substance of any
such amendment.
The trust agreement provides that a trust shall terminate upon the
liquidation, redemption or other disposition of the last of the securities held
in the trust but in no event is it to continue beyond the mandatory termination
date set forth in Part A of the prospectus. If the value of a trust shall be
less than the applicable minimum value stated in the prospectus, the trustee
may, in its discretion, and shall, when so directed by the sponsor, terminate
the trust. A trust may be terminated at any time by the holders of units
representing 66 2/3% of the units thereof then outstanding. In addition, the
sponsor may terminate a trust if it is based on a security index and the index
is no longer maintained.
Beginning nine business days prior to, but no later than, the mandatory
termination date described in the prospectus, the trustee may begin to sell all
of the remaining underlying securities on behalf of unitholders in connection
with the termination of the trust. The sponsor may assist the trustee in these
sales and receive compensation to the extent permitted by applicable law. The
sale proceeds will be net of any incidental expenses involved in the sales.
The trustee will attempt to sell the securities as quickly as it can
during the termination proceedings without, in its judgment, materially
adversely affecting the market price of the securities, but it is expected that
all of the securities will in any event be disposed of within a reasonable time
after a trust's termination. The sponsor does not anticipate that the period
will be longer than one month, and it could be as short as one day, depending
on the liquidity of the securities being sold. The liquidity of any security
depends on the daily trading volume of the security and the amount that the
sponsor has available for sale on any particular day. Of course, no assurances
can be given that the market value of the securities will not be adversely
affected during the termination proceedings.
Within a reasonable period after termination, the trustee will sell any
securities remaining in a trust and, after paying all expenses and charges
incurred by the trust, will distribute to unitholders thereof their pro rata
share of the balances remaining in the Income and Capital Accounts of the trust.
The sponsor currently intends, but is not obligated, to offer for sale
units of a subsequent series of certain trusts at approximately one year after
the inception date of such trusts. If the sponsor does offer such units for
sale, unitholders may be given the opportunity to purchase such units at a
public offering price which includes a reduced sales fee. There is, however, no
assurance that units of any new series of a trust will be offered for sale at
that time, or if offered, that there will be sufficient units available for
sale to meet the requests of any or all unitholders.
The Trustee. The trustee is The Bank of New York Mellon, a trust company
organized under the laws of New York. The Bank of New York Mellon has its Unit
Investment Trust Division offices at 2 Hanson Place, 12th Fl., Brooklyn, New
York 11217, telephone 1-800-701-8178. The Bank of New York Mellon is subject to
supervision and examination by the Superintendent of Banks of the State of New
York and the Board of Governors of the Federal Reserve System, and its deposits
are insured by the Federal Deposit Insurance Corporation to the extent
permitted by law.
The trustee, whose duties are ministerial in nature, has not participated
in selecting the portfolio of any trust. In accordance with the trust
agreement, the trustee shall keep records of all transactions at its office.
Such records shall include the name and address of, and the number of units
held by, every unitholder of a trust. Such books and records shall be open to
inspection by any unitholder at all reasonable times during usual business
hours. The trustee shall make such annual or other reports as may from time to
time be required under any applicable state or federal statute, rule or
regulation. The trustee shall keep a certified copy or duplicate original of
the trust agreement on file in its office available for inspection at all
reasonable times during usual business hours by any unitholder, together with a
current list of the securities held in each trust. Pursuant to the trust
agreement, the trustee may employ one or more agents for the purpose of custody
and safeguarding of securities comprising a trust.
Under the trust agreement, the trustee or any successor trustee may resign
and be discharged of a trust created by the trust agreement by executing an
instrument in writing and filing the same with the sponsor. The trustee or
successor trustee must mail a copy of the notice of resignation to all
unitholders then of record, not less than sixty days before the date specified
in such notice when such resignation is to take effect. The sponsor upon
receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within thirty days after
notification, the retiring trustee may apply to a court of competent
jurisdiction for the appointment of a successor. The sponsor may at any time
remove the trustee, with or without cause, and appoint a successor trustee as
provided in the trust agreement. Notice of such removal and appointment shall
be mailed to each unitholder by the sponsor. Upon execution of a written
acceptance of such appointment by such successor trustee, all the rights,
powers, duties and obligations of the original trustee shall vest in the
successor. The trustee must be a corporation organized under the laws of the
United States, or any state thereof, be authorized under such laws to exercise
trust powers and have at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
The Sponsor. Guggenheim Funds Distributors, LLC specializes in the
creation, development and distribution of investment solutions for advisors and
their valued clients. Guggenheim Funds Distributors, LLC was created as Ranson &
Associates, Inc. in 1995 and is the successor sponsor to unit investment trusts
formerly sponsored by EVEREN Unit Investment Trusts, a service of EVEREN
Securities, Inc. Guggenheim Funds Distributors, LLC is also the sponsor and
successor sponsor of Series of Ranson Unit Investment Trusts and The Kansas
Tax-Exempt Trust and Multi-State Series of The Ranson Municipal Trust. On
October 29, 2001, Ranson & Associates, Inc. was acquired by Claymore Group LLC.
The sale to Claymore Group LLC was financed by a loan from The Bank of New York
Mellon, the trustee. In November 2001, the sponsor changed its name from Ranson
& Associates, Inc. to Claymore Securities, Inc. On October 14, 2009, Guggenheim
Partners, LLC acquired Claymore Securities, Inc. Since the finalization of the
acquisition, Claymore Securities, Inc. has been operating as a subsidiary of
Guggenheim Partners, LLC. On September 27, 2010, Claymore Securities, Inc.
officially changed its name to Guggenheim Funds Distributors, LLC.
Guggenheim Funds Distributors, LLC has been active in public and corporate
finance, has underwritten closed-end funds and has sold bonds, mutual funds,
closed-end funds, exchange-traded funds, structured products and unit
investment trusts and maintained secondary market activities relating thereto.
At present, Guggenheim Funds Distributors, LLC which is a member of the
Financial Industry Regulatory Authority (FINRA), is the sponsor to each of the
above-named unit investment trusts. The sponsor's offices are located at 2455
Corporate West Drive, Lisle, Illinois 60532.
If at any time the sponsor shall fail to perform any of its duties under
the trust agreement or shall become incapable of acting or shall be adjudged a
bankrupt or insolvent or shall have its affairs taken over by public
authorities, then the trustee may (i) appoint a successor sponsor at rates of
compensation deemed by the trustee to be reasonable and not exceeding such
reasonable amounts as may be prescribed by the Securities and Exchange
Commission, (ii) terminate the trust agreement and liquidate any trust as
provided therein; or (iii) continue to act as trustee without terminating the
trust agreement.
The Supervisor and the Evaluator. Guggenheim Funds Distributors, LLC, the
sponsor, also serves as evaluator and supervisor. The evaluator and supervisor
may resign or be removed by the trustee in which event the trustee is to use
its best efforts to appoint a satisfactory successor. Such resignation or
removal shall become effective upon acceptance of appointment by the successor
evaluator. If upon resignation of the evaluator no successor has accepted
appointment within thirty days after notice of resignation, the evaluator may
apply to a court of competent jurisdiction for the appointment of a successor.
Notice of such registration or removal and appointment shall be mailed by the
trustee to each unitholder. As evaluator, Guggenheim Funds Distributors, LLC
utilizes the trustee to perform certain evaluation services.
Limitations on Liability. The sponsor is liable for the performance of its
obligations arising from its responsibilities under the trust agreement, but
will be under no liability to the unitholders for taking any action or
refraining from any action in good faith pursuant to the trust agreement or for
errors in judgment, except in cases of its own gross negligence, bad faith or
willful misconduct or its reckless disregard for its duties thereunder. The
sponsor shall not be liable or responsible in any way for depreciation or loss
incurred by reason of the sale of any securities.
The trust agreement provides that the trustee shall be under no liability
for any action taken in good faith in reliance upon prima facie properly
executed documents or for the disposition of moneys, securities or certificates
except by reason of its own gross negligence, bad faith or willful misconduct,
or its reckless disregard for its duties under the trust agreement, nor shall
the trustee be liable or responsible in any way for depreciation or loss
incurred by reason of the sale by the trustee of any securities. In the event
that the sponsor shall fail to act, the trustee may act and shall not be liable
for any such action taken by it in good faith. The trustee shall not be
personally liable for any taxes or other governmental charges imposed upon or
in respect of the securities or upon the interest thereof. In addition, the
trust agreement contains other customary provisions limiting the liability of
the trustee.
The unitholders may rely on any evaluation furnished by the evaluator and
shall have no responsibility for the accuracy thereof. The trust agreement
provides that the determinations made by the evaluator shall be made in good
faith upon the basis of the best information available to it, provided,
however, that the evaluator shall be under no liability to the trustee or
unitholders for errors in judgment, but shall be liable for its gross
negligence, bad faith or willful misconduct or its reckless disregard for its
obligations under the trust agreement.
Expenses of the Trust
The sponsor does not charge a trust an annual advisory fee. The sponsor
will receive a portion of the sale commissions paid in connection with the
purchase of units and will share in profits, if any, related to the deposit of
securities in the trust. The sponsor and/or its affiliates do, also, receive an
annual fee as set forth in Part A of the prospectus for maintaining
surveillance over the portfolio and for performing certain administrative
services for the trust (the "Sponsor's Supervisory Fee"). In providing such
supervisory services, the sponsor may purchase research from a variety of
sources, which may include dealers of the trusts. If so provided in Part A of
the prospectus, the sponsor may also receive an annual fee for providing
bookkeeping and administrative services for a trust (the "Bookkeeping and
Administrative Fee"). Such services may include, but are not limited to, the
preparation of various materials for unitholders and providing account
information to the unitholders. If so provided in Part A of the prospectus, the
evaluator may also receive an annual fee for performing evaluation services for
the trusts (the "Evaluator's Fee"). In addition, if so provided in Part A of
the prospectus, a trust may be charged an annual licensing fee to cover
licenses for the use of service marks, trademarks, trade names and intellectual
property rights and/or for the use of databases and research. The trust will
bear all operating expenses. Estimated annual trust operating expenses are as
set forth in Part A of the prospectus; if actual expenses are higher than the
estimate, the excess will be borne by the trust. The estimated expenses include
listing fees but do not include the brokerage commissions and other
transactional fees payable by the trust in purchasing and selling securities.
The trustee receives for its services that fee set forth in Part A of the
prospectus. The trustee's fee, which is paid monthly, is based on the largest
number of units of a trust outstanding at any time during the primary offering
period. After the primary offering period, the fee shall accrue daily and be
based on the number of units outstanding on the first business day of each
calendar year in which the fee is calculated or the number of units outstanding
at the end of the primary offering period, as appropriate. The Sponsor's
Supervisory Fee, the Bookkeeping and Administrative Fee and the Evaluator's Fee
are paid monthly and are based on the largest number of units of a trust
outstanding at any time during the primary offering period. After the primary
offering period, these fees shall accrue daily and be based on the number of
units outstanding on the first business day of each calendar year in which a
fee is calculated or the number of units outstanding at the end of the primary
offering period, as appropriate. The trustee benefits to the extent there are
funds for future distributions, payment of expenses and redemptions in the
Capital and Income Accounts since these Accounts are non-interest bearing and
the amounts earned by the trustee are retained by the trustee. Part of the
trustee's compensation for its services to a trust is expected to result from
the use of these funds. In addition, the Sponsor's Supervisory Fee, Bookkeeping
and Administrative Fee, Evaluator's Fee and the Trustee's Fee may be adjusted
in accordance with the cumulative percentage increase of the United States
Department of Labor's Consumer Price Index entitled "All Services Less Rent"
since the establishment of the trust. In addition, with respect to any fees
payable to the sponsor or an affiliate of the sponsor for providing bookkeeping
and other administrative services, supervisory services and evaluation
services, such individual fees may exceed the actual costs of providing such
services for a trust, but at no time will the total amount received for such
services, in the aggregate, rendered to all unit investment trusts of which
Guggenheim Funds Distributors, LLC is the sponsor in any calendar year exceed
the actual cost to the sponsor or its affiliates of supplying such services, in
the aggregate, in such year. In addition, the trustee may reimburse the sponsor
out of its own assets for services performed by employees of the sponsor in
connection with the operation of your trust.
The trust will also pay a fee to the sponsor for creating and developing
the trust, including determining the trust's objective, policies, composition
and size, selecting service providers and information services, and for
providing other similar administrative and ministerial functions. Your trust
pays this "creation and development fee" as a fixed dollar amount at the close
of the initial offering period. The sponsor does not use the fee to pay
distribution expenses or as compensation for sales efforts.
The following additional charges are or may be incurred by the trust: (i)
fees for the trustee's extraordinary services; (ii) expenses of the trustee
(including legal and auditing expenses, but not including any fees and expenses
charged by an agent for custody and safeguarding of securities) and of counsel,
if any; (iii) various governmental charges; (iv) expenses and costs of any
action taken by the trustee to protect the trust or the rights and interests of
the unitholders; (v) indemnification of the trustee for any loss, liability or
expense incurred by it in the administration of the trust not resulting from
gross negligence, bad faith or willful misconduct on its part; (vi)
indemnification of the sponsor for any loss, liability or expense incurred in
acting in that capacity without gross negligence, bad faith or willful
malfeasance or its reckless disregard for its obligations under the trust
agreement; (vii) any offering costs incurred after the end of the initial
offering period; and (viii) expenditures incurred in contacting unitholders
upon termination of the trust. The fees and expenses set forth herein are
payable out of a trust and, when owing to the trustee, are secured by a lien on
the trust. Since the securities are all stocks, and the income stream produced
by dividend payments, if any, is unpredictable, the sponsor cannot provide any
assurance that dividends will be sufficient to meet any or all expenses of a
trust. If the balances in the Income and Capital Accounts are insufficient to
provide for amounts payable by the trust, the trustee has the power to sell
securities to pay such amounts. These sales may result in capital gains or
losses to unitholders. It is expected that the income stream produced by
dividend payments may be insufficient to meet the expenses of a trust and,
accordingly, it is expected that securities will be sold to pay all of the fees
and expenses of the trust.
The trust shall also bear the expenses associated with updating the
trust's registration statement and maintaining registration or qualification of
the units and/or a trust under federal or state securities laws subsequent to
initial registration. Such expenses shall include legal fees, accounting fees,
typesetting fees, electronic filing expenses and regulatory filing fees. The
expenses associated with updating registration statements have been
historically paid by a unit investment trust's sponsor.
Portfolio Transactions and Brokerage Allocation
When a trust sells securities, the composition and diversity of the
securities in the trust may be altered. In order to obtain the best price for a
trust, it may be necessary for the supervisor to specify minimum amounts (such
as 100 shares) in which blocks of securities are to be sold. In effecting
purchases and sales of a trust's portfolio securities, the sponsor may direct
that orders be placed with and brokerage commissions be paid to brokers,
including brokers which may be affiliated with the trust, the sponsor or
dealers participating in the offering of units.
Purchase, Redemption and Pricing of Units
Public Offering Price. Units of a trust are offered at the public offering
price (which is based on the aggregate underlying value of the securities in
the trust and includes the initial sales fee plus a pro rata share of any
accumulated amounts in the accounts of the trust). The initial sales fee is
equal to the difference between the maximum sales fee and the sum of the
remaining deferred sales fee and the creation and development fee ("C&D Fee").
The maximum sales fee is set forth in Part A of the prospectus. The deferred
sales fee and the C&D Fee will be collected as described in this prospectus.
Units purchased subsequent to the initial deferred sales fee payment will be
subject to the initial sales fee, the remaining deferred sales fee payments and
the C&D Fee. Units sold or redeemed prior to such time as the entire applicable
deferred sales fee has been collected will be assessed the remaining deferred
sales fee at the time of such sale or redemption. During the initial offering
period, a portion of the public offering price includes an amount of securities
to pay for all or a portion of the costs incurred in establishing a trust
("organization costs"). These organization costs include the cost of preparing
the registration statement, the trust indenture and other closing documents,
registering units with the Securities and Exchange Commission and states, the
initial audit of the trust portfolio, legal fees, fees paid to a portfolio
consultant for assisting the sponsor in selecting the trust's portfolio, and
the initial fees and expenses of the trustee. These costs will be deducted from
a trust as of the end of the initial offering period or after six months, at
the discretion of the sponsor. As indicated above, the initial public offering
price of the units was established by dividing the aggregate underlying value
of the securities by the number of units outstanding. Such price determination
as of the opening of business on the date a trust was created was made on the
basis of an evaluation of the securities in the trust prepared by the
evaluator. After the opening of business on this date, the evaluator will
appraise or cause to be appraised daily the value of the underlying securities
as of the close of the New York Stock Exchange on days the New York Stock
Exchange is open and will adjust the public offering price of the units
commensurate with such valuation. Such public offering price will be effective
for all orders properly received at or prior to the close of trading on the New
York Stock Exchange on each such day. Orders received by the trustee, sponsor
or any dealer for purchases, sales or redemptions after that time, or on a day
when the New York Stock Exchange is closed, will be held until the next
determination of price.
The value of the securities is determined on each business day by the
evaluator based on the closing sale prices on a national securities exchange or
the NASDAQ National Market System or by taking into account the same factors
referred to under "Computation of Redemption Price."
Public Distribution of Units. During the initial offering period, units of
a trust will be distributed to the public at the public offering price thereof.
Upon the completion of the initial offering, units which remain unsold or which
may be acquired in the secondary market may be offered at the public offering
price determined in the manner provided above.
The sponsor intends to qualify units of a trust for sale in a number of
states. Units will be sold through dealers who are members of FINRA and through
others. Broker-dealers and others will be allowed a concession or agency
commission in connection with the distribution of units during the initial
offering period as set forth in the prospectus.
The sponsor reserves the right to reject, in whole or in part, any order
for the purchase of units.
Sponsor Profits. The sponsor will receive gross sales fees equal to the
percentage of the public offering price of the units of a trust described in the
prospectus. In addition, the sponsor may realize a profit (or sustain a loss) as
of the date a trust is created resulting from the difference between the
purchase prices of the securities to the sponsor and the cost of such securities
to the trust. Thereafter, on subsequent deposits the sponsor may realize profits
or sustain losses from such deposits. The sponsor may realize additional profits
or losses during the initial offering period on unsold units as a result of
changes in the daily market value of the securities in the trust.
Market for Units. After the initial offering period, the sponsor may
maintain a market for units of a trust offered hereby and continuously offer to
purchase said units at prices, determined by the evaluator, based on the value
of the underlying securities. Unitholders who wish to dispose of their units
should inquire of their broker as to current market prices in order to
determine whether there is in existence any price in excess of the redemption
price and, if so, the amount thereof. Unitholders who sell or redeem units
prior to such time as the entire deferred sales fee on such units has been
collected will be assessed the amount of the remaining deferred sales fee at
the time of such sale or redemption. The offering price of any units resold by
the sponsor will be in accord with that described in the currently effective
prospectus describing such units. Any profit or loss resulting from the resale
of such units will belong to the sponsor. If the sponsor decides to maintain a
secondary market, it may suspend or discontinue purchases of units of the trust
if the supply of units exceeds demand, or for other business reasons.
Redemption. A unitholder who does not dispose of units in the secondary
market described above may cause units to be redeemed by the trustee by making
a written request to the trustee at its Unit Investment Trust Division office
in the city of New York. Unitholders must sign the request, and such transfer
instrument, exactly as their names appear on the records of the trustee. If the
amount of the redemption is $500 or less and the proceeds are payable to the
unitholder(s) of record at the address of record, no signature guarantee is
necessary for redemptions by individual account owners (including joint
owners). Additional documentation may be requested, and a signature guarantee
is always required, from corporations, executors, administrators, trustees,
guardians or associations. The signatures must be guaranteed by a participant
in the Securities Transfer Agents Medallion Program ("STAMP") or such other
signature guaranty program in addition to, or in substitution for, STAMP, as
may be accepted by the trustee.
Redemption shall be made by the trustee no later than the third business
day following the day on which a tender for redemption is received (the
"Redemption Date") by payment of cash equivalent to the redemption price,
determined as set forth below under "Computation of Redemption Price," as of
the close of the New York Stock Exchange next following such tender, multiplied
by the number of units being redeemed. Any units redeemed shall be canceled and
any undivided fractional interest in the related trust extinguished. The price
received upon redemption might be more or less than the amount paid by the
unitholder depending on the value of the securities in the trust at the time of
redemption. Unitholders who sell or redeem units prior to such time as the
entire deferred sales fee on such units has been collected will be assessed the
amount of the remaining deferred sales fee at the time of such sale or
redemption. Certain broker-dealers may charge a transaction fee for processing
redemption requests.
Under regulations issued by the Internal Revenue Service, the trustee is
required to withhold a specified percentage of the principal amount of a unit
redemption if the trustee has not been furnished the redeeming unitholder's tax
identification number in the manner required by such regulations. Any amount so
withheld is transmitted to the Internal Revenue Service and may be recovered by
the unitholder only when filing a tax return. Under normal circumstances the
trustee obtains the unitholder's tax identification number from the selling
broker. However, any time a unitholder elects to tender units for redemption,
such unitholder should make sure that the trustee has been provided a certified
tax identification number in order to avoid this possible "back-up
withholding." In the event the trustee has not been previously provided such
number, one must be provided at the time redemption is requested. Any amounts
paid on redemption representing unpaid dividends shall be withdrawn from the
Income Account of a trust to the extent that funds are available for such
purpose. All other amounts paid on redemption shall be withdrawn from the
Capital Account for a trust.
Unitholders tendering units for redemption may request an in-kind
distribution (a "Distribution In Kind") from the trustee in lieu of cash
redemption. A unitholder may request a Distribution In Kind of an amount and
value of securities per unit equal to the redemption price per unit as
determined as of the evaluation time next following the tender, provided that
the tendering unitholder is (i) entitled to receive at least $25,000 of
proceeds as part of his or her distribution or if he paid at least $25,000 to
acquire the units being tendered; and (ii) the unitholder has elected to redeem
at least thirty business days prior to the termination of the trust. If the
unitholder meets these requirements, a Distribution In Kind will be made by the
trustee through the distribution of each of the securities of the trust in book
entry form to the account of the unitholder's bank or broker-dealer at
Depository Trust Company. The tendering unitholder shall be entitled to receive
whole shares of each of the securities comprising the portfolio of the trust
and cash from the Capital Account equal to the fractional shares to which the
tendering unitholder is entitled. The trustee shall make any adjustments
necessary to reflect differences between the redemption price of the units and
the value of the securities distributed in kind as of the date of tender. If
funds in the Capital Account are insufficient to cover the required cash
distribution to the tendering unitholder, the trustee may sell securities. The
in-kind redemption option may be terminated by the sponsor at any time. The
trustee is empowered to sell securities in order to make funds available for
the redemption of units. To the extent that securities are sold or redeemed in
kind, the size of a trust will be, and the diversity of a trust may be, reduced
but each remaining unit will continue to represent approximately the same
proportional interest in each security. Sales may be required at a time when
securities would not otherwise be sold and may result in lower prices than
might otherwise be realized. The price received upon redemption may be more or
less than the amount paid by the unitholder depending on the value of the
securities in the portfolio at the time of redemption.
Unitholders of a trust that holds closed-end funds or other investment
company securities who request a Distribution In Kind will be subject to any
12b-1 Fees or other service or distribution fees applicable to the underlying
securities.
The right of redemption may be suspended and payment postponed for more
than three business days following the day on which tender for redemption is
made (i) for any period during which the New York Stock Exchange is closed,
other than customary weekend and holiday closings, or during which (as
determined by the Securities and Exchange Commission) trading on the New York
Stock Exchange is restricted; (ii) for any period during which an emergency
exists as a result of which disposal by the trustee of securities is not
reasonably practicable or it is not reasonably practicable to fairly determine
the value of the underlying securities in accordance with the trust agreement;
or (iii) for such other period as the Securities and Exchange Commission may by
order permit. The trustee is not liable to any person in any way for any loss
or damage which may result from any such suspension or postponement.
Computation of Redemption Price. The redemption price per unit (as well as
the secondary market public offering price) will generally be determined on the
basis of the last sale price of the securities in a trust. The redemption price
per unit is the pro rata share of each unit in a trust determined generally on
the basis of (i) the cash on hand in the trust or moneys in the process of
being collected; and (ii) the value of the securities in the trust less (a)
amounts representing taxes or other governmental charges payable out of the
trust, (b) any amount owing to the trustee for its advances and (c) the accrued
expenses or remaining deferred sales fees of the trust. During the initial
offering period, the redemption price and the secondary market repurchase price
will also include estimated organizational costs. The evaluator may determine
the value of the securities in the trust in the following manner: if the
securities are listed on a national or foreign securities exchange or the
NASDAQ National Market System, such evaluation shall generally be based on the
last available sale price on or immediately prior to the Evaluation Time on the
exchange or NASDAQ National Market System which is the principal market
therefor, which shall be deemed to be the New York Stock Exchange if the
securities are listed thereon (unless the evaluator deems such price
inappropriate as a basis for evaluation) or, if there is no such available sale
price on such exchange, at the last available bid prices (offer prices for
primary market purchases) of the securities. Securities not listed on the New
York Stock Exchange but principally traded on the NASDAQ National Market System
will be valued at the NASDAQ National Market System's official closing price.
If the securities are not so listed or, if so listed, the principal market
therefor is other than on such exchange or there is no such available sale
price on such exchange, such evaluation shall generally be based on the
following methods or any combination thereof whichever the evaluator deems
appropriate: (i) on the basis of the current bid price (offer prices for
primary market purchases) for comparable securities (unless the evaluator deems
such price inappropriate as a basis for evaluation); (ii) by determining the
valuation of the securities on the bid side (offer side for primary market
purchases) of the market by appraisal; or (iii) by any combination of the
above. Notwithstanding the foregoing, the evaluator or its designee, will
generally value foreign securities primarily traded on foreign exchanges at
their fair value which may be other than their market price. If the trust holds
securities denominated in a currency other than U.S. dollars, the evaluation of
such security is based upon U.S. dollars based on current bid side (offer side
for primary market purchases) exchange rates (unless the evaluator deems such
prices inappropriate as a basis for valuation).
Retirement Plans. A trust may be well suited for purchase by Individual
Retirement Accounts, Keogh Plans, pension funds and other qualified retirement
plans. Generally, capital gains and income received under each of the foregoing
plans are deferred from federal taxation. All distributions from such plans are
generally treated as ordinary income but may, in some cases, be eligible for
special income averaging or tax deferred rollover treatment. Investors
considering participation in any such plan should review specific tax laws
related thereto and should consult their attorneys or tax advisers with respect
to the establishment and maintenance of any such plan. Such plans are offered
by brokerage firms and other financial institutions. The trust will lower the
minimum investment requirement for IRA accounts to 1 unit. Fees and charges
with respect to such plans may vary.
Ownership of Units. Ownership of units will not be evidenced by
certificates. All evidence of ownership of units will be recorded in book entry
form at Depository Trust Company ("DTC") through an investor's brokers'
account. Units held through DTC will be registered in the nominee name of Cede
& Co. Individual purchases of beneficial ownership interest in the trust will
be made in book entry form through DTC. Ownership and transfer of units will be
evidenced and accomplished by book entries made by DTC and its participants.
DTC will record ownership and transfer of the units among DTC participants and
forward all notices and credit all payments received in respect of the units
held by the DTC participants. Beneficial owners of units will receive written
confirmation of their purchases and sale from the broker dealer or bank from
whom their purchase was made. Units are transferable by making a written
request properly accompanied by a written instrument or instruments of transfer
which should be sent registered or certified mail for the protection of the
unitholder. Record holders must sign such written request exactly as their
names appear on the records of the trust. The signatures must be guaranteed by
a participant in the STAMP or such other signature guaranty program in addition
to, or in substitution for, STAMP, as may be acceptable by the trustee.
Units may be purchased in denominations of one unit or any multiple
thereof, subject to the minimum investment requirement. Fractions of units, if
any, will be computed to three decimal places.
Taxes
This section summarizes some of the main U.S. federal income tax
consequences of owning units of a trust. This section is current as of the date
of this prospectus. Tax laws and interpretations change frequently, and these
summaries do not describe all of the tax consequences to all taxpayers. For
example, these summaries generally do not describe your situation if you are a
corporation, a non-U.S. person, a broker/dealer, or other investor with special
circumstances. In addition, this section does not describe your state, local or
foreign tax consequences.
This federal income tax summary is based in part on the advice of counsel
to the sponsor. The Internal Revenue Service could disagree with any
conclusions set forth in this section. In addition, our counsel was not asked
to review, and has not reached a conclusion with respect to the federal income
tax treatment of the assets to be deposited in your trust. This may not be
sufficient for you to use for the purpose of avoiding penalties under federal
tax law.
As with any investment, you should seek advice based on your individual
circumstances from your own tax advisor.
Trust Status. Your trust intends to qualify as a "regulated investment
company" under the federal tax laws. If your trust qualifies as a regulated
investment company and distributes its income as required by the tax law, the
trust generally will not pay federal income taxes.
Distributions. Trust distributions are generally taxable. After the end of
each year, you will receive a tax statement that separates your trust's
distributions into two categories, ordinary income distributions and capital
gains dividends. Ordinary income distributions are generally taxed at your
ordinary tax rate, however, as further discussed below, certain ordinary income
distributions received from the trust may be taxed at the capital gains tax
rates. Generally, you will treat all capital gains dividends as long-term
capital gains regardless of how long you have owned your units. To determine
your actual tax liability for your capital gains dividends, you must calculate
your total net capital gain or loss for the tax year after considering all of
your other taxable transactions, as described below. In addition, your trust may
make distributions that represent a return of capital for tax purposes and thus
will generally not be taxable to you. The tax status of your distributions from
your trust is not affected by whether you reinvest your distributions in
additional units or receive them in cash. The income from your trust that you
must take into account for federal income tax purposes is not reduced by amounts
used to pay a deferred sales fee, if any. The tax laws may require you to treat
distributions made to you in January as if you had received them on December 31
of the previous year. Under the "Health Care and Education Reconciliation Act of
2010," income from a trust may also be subject to a new 3.8% "Medicare tax"
imposed for taxable years beginning after 2012. This tax will generally apply to
your net investment income if your adjusted gross income exceeds certain
threshold amounts, which are $250,000 in the case of married couples filing
joint returns and $200,000 in the case of single individuals.
Dividends Received Deduction. A corporation that owns units generally will
not be entitled to the dividends received deduction with respect to many
dividends received from the trust because the dividends received deduction is
generally not available for distributions from regulated investment companies.
However, certain ordinary income dividends on units that are attributable to
qualifying dividends received by the trust from certain corporations may be
reported by the trust as being eligible for the dividends received deduction.
Sale or Redemption of Units. If you sell or redeem your units, you will
generally recognize a taxable gain or loss. To determine the amount of this
gain or loss, you must subtract your tax basis in your units from the amount
you receive in the transaction. Your tax basis in your units is generally equal
to the cost of your units, generally including sales charges. In some cases,
however, you may have to adjust your tax basis after you purchase your units.
Capital Gains and Losses and Certain Ordinary Income Dividends. If you are
an individual, the maximum marginal stated federal tax rate for net capital
gain is generally 20% for taxpayers in the 39.6% tax bracket, 15% for taxpayers
in the 25%, 28%, 33% and 35% tax brackets and 0% for taxpayers in the 10% and
15% tax brackets. Capital gain received from assets held for more than one year
that is considered "unrecaptured section 1250 gain" (which may be the case, for
example, with some capital gains attributable to equity interests in real
estate investment trusts that constitute interests in entities treated as real
estate investment trusts for federal income tax purposes) is taxed at a maximum
stated tax rate of 25%. In the case of capital gains dividends, the
determination of which portion of the capital gains dividend, if any, is
subject to the 25% tax rate, will be made based on rules prescribed by the
United States Treasury. Capital gains may also be subject to the Medicare Tax
described above.
Net capital gain equals net long-term capital gain minus net short-term
capital loss for the taxable year. Capital gain or loss is long-term if the
holding period for the asset is more than one year and is short-term if the
holding period for the asset is one year or less. You must exclude the date you
purchase your Units to determine your holding period. However, if you receive a
capital gain dividend from your trust and sell your unit at a loss after
holding it for six months or less, the loss will be recharacterized as
long-term capital loss to the extent of the capital gain dividend received. The
tax rates for capital gains realized from assets held for one year or less are
generally the same as for ordinary income. The Internal Revenue Code treats
certain capital gains as ordinary income in special situations.
Ordinary income dividends received by an individual unitholder from a
regulated investment company such as the trust are generally taxed at the same
rates that apply to net capital gain (as discussed above), provided certain
holding period requirements are satisfied and provided the dividends are
attributable to qualifying dividends received by the trust itself.
Distributions with respect to shares in real estate investment trusts are
qualifying dividends only in limited circumstances. Your trust will provide
notice to its unitholders of the amount of any distribution which may be taken
into account as a dividend which is eligible for the capital gains tax rates.
In-Kind Distributions. Under certain circumstances, as described in this
prospectus, you may receive an in-kind distribution of trust securities when
you redeem units or up to 30 business days before your trust terminates.
However, this ability to request an in-kind distribution will terminate at any
time that the number of outstanding units has been reduced to 10% or less of
the highest number of units issued by the trust. By electing to receive an
in-kind distribution, you will receive trust securities plus, possibly, cash.
This distribution will be treated as a sale for federal income tax purposes and
you will generally recognize gain or loss, generally based on the value at that
time of the securities and the amount of cash received. The Internal Revenue
Service could, however, assert that a loss could not be currently deducted.
Exchanges. If you elect to have your proceeds from your trust rolled over
into a future series of the trust, the exchange would generally be considered a
sale for federal income tax purposes.
Deductibility of Trust Expenses. Expenses incurred and deducted by your
trust will generally not be treated as income taxable to you. In some cases,
however, you may be required to treat your portion of these trust expenses as
income. In these cases you may be able to take a deduction for these expenses.
However, certain miscellaneous itemized deductions, such as investment
expenses, may be deducted by individuals only to the extent that all of these
deductions exceed 2% of the individual's adjusted gross income. Some
individuals may also be subject to further limitations on the amount of their
itemized deductions, depending on their income.
Foreign Tax Credit. If your trust invests in any foreign securities, the
tax statement that you receive may include an item showing foreign taxes your
trust paid to other countries. In this case, dividends taxed to you will
include your share of the taxes your trust paid to other countries. You may be
able to deduct or receive a tax credit for your share of these taxes.
Investments in Certain Foreign Corporations. If the trust holds an equity
interest in any "passive foreign investment companies" ("PFICs"), which are
generally certain foreign corporations that receive at least 75% of their
annual gross income from passive sources (such as interest, dividends, certain
rents and royalties or capital gains) or that hold at least 50% of their assets
in investments producing such passive income, the trust could be subject to
U.S. federal income tax and additional interest charges on gains and certain
distributions with respect to those equity interests, even if all the income or
gain is timely distributed to its Unitholders. The trust will not be able to
pass through to its Unitholders any credit or deduction for such taxes. The
trust may be able to make an election that could ameliorate these adverse tax
consequences. In this case, the trust would recognize as ordinary income any
increase in the value of such PFIC shares, and as ordinary loss any decrease in
such value to the extent it did not exceed prior increases included in income.
Under this election, the trust might be required to recognize in a year income
in excess of its distributions from PFICs and its proceeds from dispositions of
PFIC stock during that year, and such income would nevertheless be subject to
the distribution requirement and would be taken into account for purposes of
the 4% excise tax. Dividends paid by PFICs are not treated as qualified
dividend income.
Foreign Investors. If you are a foreign investor (i.e., an investor other
than a U.S. citizen or resident or a U.S. corporation, partnership, estate or
trust), you should be aware that, generally, subject to applicable tax
treaties, distributions from your trust will be characterized as dividends for
federal income tax purposes (other than dividends which the trust properly
reports as capital gain dividends) and will be subject to U.S. income taxes,
including withholding taxes, subject to certain exceptions described below.
However, distributions received by a foreign investor from your trust that are
properly reported by the trust as capital gain dividends may not be subject to
U.S. federal income taxes, including withholding taxes, provided that the trust
makes certain elections and certain other conditions are met. Distributions in
respect of units may be subject to a U.S. withholding tax of 30% in the case of
distributions to (i) certain non-U.S. financial institutions that have not
entered into an agreement with the U.S. Treasury to collect and disclose
certain information and are not resident in a jurisdiction that has entered
into such an agreement with the U.S. Treasury; and (ii) certain other non-U.S.
entities that do not provide certain certifications and information about the
entity's U.S. owners. Dispositions of units by such persons may be subject to
such withholding after December 31, 2016.
Experts
Legal Matters. Chapman and Cutler LLP, 111 West Monroe Street, Chicago,
Illinois 60603, acts as counsel for the trust and has passed upon the legality
of the units.
Independent Registered Public Accounting Firm. The statement of financial
condition, including the Trust Portfolio, appearing herein, has been audited by
Grant Thornton LLP, an independent registered public accounting firm, as set
forth in their report thereon appearing elsewhere herein, and is included in
reliance on such report given on the authority of such firm as experts in
accounting and auditing.
GUGGENHEIM DEFINED PORTFOLIOS
GUGGENHEIM PORTFOLIO PROSPECTUS-PART B
_______, 2017
Where to Learn More
You can contact us for free information about this and other investments.
Visit us on the Internet
http://www.guggenheiminvestments.com
Call Guggenheim Funds
(800) 345-7999
Pricing Line (888) 248-4954
Call The Bank of New York Mellon
(800) 701-8178 (investors)
(800) 647-3383 (brokers)
Additional Information
This prospectus does not contain all information filed with the Securities
and Exchange Commission. To obtain a copy of this information (a duplication fee
may be required):
E mail: publicinfo@sec.gov
Write: Public Reference Room
Washington, D.C. 20549-0102
Visit: http://www.sec.gov (EDGAR Database)
Call: 1-202-942-8090 (only for information on the operation of the Public
Reference Room)
When units of the trust are no longer available, we may use this
prospectus as a preliminary prospectus for a future trust. In this case you
should note that:
The information in this prospectus is not complete with respect to future
trusts and may be changed. No one may sell units of a future trust until a
registration statement is filed with the Securities and Exchange Commission and
is effective. This prospectus is not an offer to sell units and is not
soliciting an offer to buy units in any state where the offer or sale is not
permitted.
Contents
Investment Summary
--------------------------------------------------------
A concise 2 Overview
description 2 Investment Objective
of essential 2 Principal Investment Strategy
information 4 Assets Held by the Trust
about the 6 The ETF and The Index
portfolio 7 Essential Information
7 Summary of Defined Terms
7 Principal Risks
12 Who Should Invest
13 Fees and Expenses
14 Example
15 Trust Portfolio
Understanding Your Investment
--------------------------------------------------------
Detailed 17 How to Buy Units
information 22 How to Sell Your Units
to help you 24 Distributions
understand 25 Investment Risks
your 30 How the Trust Works
investment 31 General Information
31 Expenses
33 Report of Independent Registered Public
Accounting Firm
34 Statement of Financial Condition
35 Appendix
For the Table of Contents of Part B, see Part B of the prospectus.
Where to Learn More
--------------------------------------------------------------------------------
You can contact us for Visit us on the Internet
free information about http://www.guggenheiminvestments.com
these investments. Call Guggenheim Funds (800) 345-7999
Pricing Line (888) 248-4954
Call The Bank of New York Mellon
(800) 701-8178 (investors)
(800) 647-3383 (brokers)
Additional Information
--------------------------------------------------------------------------------
This prospectus does not contain all information filed with the Securities and
Exchange Commission. To obtain or copy this information (a duplication fee may
be required):
E-mail: publicinfo@sec.gov
--------------------------------------------------
Write: Public Reference Room, Washington, D.C. 20549-0102
Visit: http://www.sec.gov (EDGAR Database)
Call: 1-202-942-8090 (only for information on
the operation of the Public Reference Room)
Refer to:
Guggenheim Defined Portfolios, Series 1561
Securities Act file number: 333-______
Investment Company Act file number: 811-03763
When units of the trust are no longer available, we may use this prospectus as
a preliminary prospectus for a future trust. In this case you should note that:
The information in this prospectus is not complete with respect to future
trusts and may be changed. No one may sell units of a future trust until a
registration statement is filed with the Securities and Exchange Commission and
is effective. This prospectus is not an offer to sell units and is not
soliciting an offer to buy units in any state where the offer or sale is not
permitted.
GUGGENHEIM LOGO
PROSPECTUS
Guggenheim SPY Accelerated Return Trust, Series 1
LOGO UNIT INVESTMENT TRUSTS
Guggenheim Defined Portfolios Series 1561
DATED _______, 2017
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities
Exchange Act of 1934, the undersigned registrant hereby undertakes to file with
the Securities and Exchange Commission such supplementary and periodic
information, documents, and reports as may be prescribed by any rule or
regulation of the Commission heretofore or hereafter duly adopted pursuant to
authority conferred in that section.
CONTENTS OF REGISTRATION STATEMENT
A. Bonding Arrangements of Depositor:
The Depositor has obtained the following Securities Dealer Blanket Bond for
its officers, directors and employees:
INSURER/POLICY NO. AMOUNT
National Union Fire Insurance
Company of Pittsburgh, Pennsylvania
5692790 $4,000,000
This Registration Statement comprises the following papers and documents.
The Facing Sheet
The Prospectus
The Signatures
Consents of Counsel
Exhibits
The following exhibits:
1.1 Reference Trust Agreement (to be supplied by amendment).
1.1.1 Standard Terms and Conditions of Trust (Reference is made to Exhibit
1.1.1 to Amendment No. 2 to the Registration Statement on Form S-6 for
Claymore Securities Defined Portfolios, Series 116 (File No.
333-72828) filed on December 18, 2001).
2.1 Code of Ethics (Reference is made to Exhibit 2.1 to the Registration
Statement on Form S-6 for Claymore Securities Deferred Portfolios,
Series 213 (File No. 333-122184) filed on February 9, 2005).
3.1 Opinion of counsel as to legality of the securities being registered
including a consent to the use of its name in the Registration
Statement (to be supplied by amendment).
3.2 Opinion of counsel as to the Trustee and the Trust(s), including a
consent to the use of its name in the Registration Statement (to be
supplied by amendment).
4.1 Consent of Independent Registered Public Accounting Firm (to be
supplied by amendment).
6.0 Powers of Attorney authorizing Amy Lee to execute the Registration
Statement. (Reference is made to Exhibit 6.0 to the Registration
Statement on Form S-6 for Guggenheim Defined Portfolios, Series 1501
(File No. 333-212881) filed on August 3, 2016).
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant,
Guggenheim Defined Portfolios, Series 1561 has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Lisle, and State of Illinois, on the 15th day of
February, 2017.
GUGGENHEIM DEFINED PORTFOLIOS, SERIES 1561, Registrant
By: GUGGENHEIM FUNDS DISTRIBUTORS, LLC, Depositor
By: /s/ Amy Lee
---------------
Amy Lee
Vice President and Secretary
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the date indicated:
SIGNATURE* TITLE DATE
)
) By: /s/ Amy Lee
) -----------
) Amy Lee
DONALD C. CACCIAPAGLIA* Chief Executive Officer and ) Attorney-in-Fact*
President of Guggenheim Funds )
Distributors, LLC ) February 15, 2017
)
DOMINICK COGLIANDRO* Chief Operating Officer of ) February 15, 2017
Guggenheim Funds Distributors, )
LLC )
)
JULIE JACQUES* Treasurer of Guggenheim Funds ) February 15, 2017
Distributors, LLC )
)
JULIE JACQUES* Principal Financial Officer of ) February 15, 2017
Guggenheim Funds Distributors, )
LLC )
FARHAN SHARAFF Chief Investment Officer of
Guggenheim Funds Distributors,
LLC
/s/ Amy Lee Vice President and Secretary of February 15, 2017
----------- Guggenheim Funds Distributors,
AMY LEE LLC
-------------------------
* Executed copies of the related powers of attorney were filed as Exhibit 6.0
to the Registration Statement of Guggenheim Defined Portfolios, Series 1501
on August 3, 2016.
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The consent of Grant Thornton LLP to the use of its report and to the
reference to such firm in the Prospectus included in the Registration Statement
will be filed as Exhibit 4.1 to the Registration Statement.
CONSENT OF CHAPMAN AND CUTLER LLP
The consent of Chapman and Cutler LLP to the use of its name in the
Prospectus included in the Registration Statement will be contained in its
opinion to be filed as Exhibit 3.1 to the Registration Statement.
CONSENT OF DORSEY & WHITNEY LLP
The consent of Dorsey & Whitney LLP to the use of its name in the
Prospectus included in the Registration Statement will be contained in its
opinion to be filed as Exhibit 3.2 to the Registration Statement.
MEMORANDUM
Re: Guggenheim Defined Portfolios, Series 1561
The list of securities comprising the trust of the fund, the evaluation,
record and distribution dates and other changes pertaining specifically to the
new series, such as size and number of units of the trust in the fund and the
statement of financial condition of the new fund will be filed by amendment.
1940 ACT
FORMS N-8A AND N-8B-2
Form N-8A and Form N-8B-2 were filed in respect of Guggenheim Defined
Portfolios, Series 718 (and subsequent series) (File No. 333-169214).
1933 ACT
THE INDENTURE
The form of the proposed Standard Terms and Conditions of Trust is expected
to be in all respects consistent with the form of the Standard Terms and
Conditions of Trust dated December 18, 2001 relative to Claymore Securities
Defined Portfolios, Series 116.
CHAPMAN AND CUTLER LLP
Chicago, Illinois
February 15, 2017